The pyramid forex trading strategy allows a trader to play with the market’s cash since as an exchange moves in his favor so does your stop-loss trail down(or up) to lock in gain when another position is added. Thus, your overall risk on the exchange halts the same or declines as you lock in gain, but your potential gain rises, allowing you to gain enormous profits with no additional exchanging risks involved.
- The floor forex traders’ technique is also one favorable foreign exchange system for utilizing the pyramid trading strategy.
- The trend line exchanging technique is another favorable one.
- 123 pattern foreign exchange technique is favorable for pyramid trading technique.
- Double your foreign exchange trading account technique.
The diagram below explains perfectly:
How to Exchange
Pyramid trading strategy works by increasing onto successful positions.
For Instance, say EUR/USD is an uptrend and you have an exchanging technique that provides you a purchase signal:
- You can begin exchange with one contract, you place your stop-loss and that is your first exchange now.
- Then your exchanging system provides you an indicator to purchase, and purchase another one contract, you place a stop-loss…this is your second exchange.
- Now, what you do is precede the stop-loss of the first exchange and place it at the same height where you laced the stop-loss of the second exchange. In that same situation, you have only one risk, which is the risk of the second exchange. But you do not have any risk involved on the first exchange.
- Later you detect another purchase signal and decide to proceed with the third exchange. At the moment, you have to precede the following stop-losses of the 1st exchange s well as the second exchange and place it at the height where the stop-loss of the third exchange was placed. In this situation, exchange one gained an enormous profits, zero risk in the second exchange while as risk is only incurred in the third exchange.
The diagram beneath is the same as the diagram above but with immense structure of how pyramiding trading strategy really works:
Utilize this strategy at your own risk. WindsorForex.com cannot be responsible for any losses associated with using any strategy presented on the site. It’s not recommended to use this strategy on the real account without testing it on demo first.