Forex Education Center And Investment- How To Make Profit By Switching Techniques,There are times when the market moves do not fit our predictions, so we have open positions become lose,but in such conditions we can still strive to turn into profit is to do the switching.
Switching is based on the meaning of the word is change. In forex trading, a switching strategy is to change the direction by closing losing positions and opened a new position in the opposite direction from the position it has closed on the expected position of the latter will be greater than the loss in the first position is already closed.
For example:
Currently the price of GBP / USD is 1.5500. I predict BGP / USD will rise towards 1.5600. Therefore I open a buy position.
Lapse of how many hours it turns GBP / USD moves opposite to my prediction, GBP / USD down and is now at the level of 1.5450 .Artinya my long positions lose 50 points.
After re-analyzed, it turns out GBP / USD will fall towards the 1.5350 level.
So that today I do not lose, I decided to close my long position with a loss of 50 points and opening new short positions.
After a few hours it is true that the market moves according to analysis result that both fell, and is now at the level of 1.5375
Finally, after feeling the profit earned enough, then I closed my short position with 75 points profit.
Of accumulation 2 above transaction with switching, today I profit by 25 points is 75 points deducted from profit loss of 50 points.
Tips in pursuing a strategy of switching
- Perform switching to open a second position which is opposite to the first position only if the prediction gain second position exceeds the value of the first loss position would be closed.
- Should do the switching when the big trend will be formed, that is, when the breakout band.
Switching forex strategy requires an analysis that is convincing, because if it is not convinced with the second prediction, only to cut losses should first position without having to be forwarded to the switching. If we are still forced to be tossed around by the market and instead suffer a loss 2-fold.
