Averaging Strategy In Forex

 

 

Averaging Strategy In Forex

To minimize losses when the position we are in the opposite direction to the trend, as well as to maximize profits while our position in line with the trend, we could use Averaging Strategy.

Averaging based on the meaning he is averaging. In the case of open positions, averaging strategy is useful for averaging the position opening price. Where at a certain level, regardless of the condition of its market value is the position that we open IMPAS.

In trading, meaning Averaging is opened again a new position in accordance with long positions although this time the price moves against, in the belief that the market will soon move in accordance with our predictions.

Judging from goal, averaging strategy used for:

1. Enlarge profits

For example:

I predict the market will go up, so I open a buy position.
Moments later it turned the market is going up, but I see the market will rise even higher. So I open a buy position again.
Because I still think the market is very strong to go up again, I open a buy position again.

When the market rises, now I have three long positions that are profit It so if I close the third position, I profit more when compared to not perform averaging.

2. Accelerate Breakeven at a loss.

For example:

I predict the market will go up, then I open a buy position.
Moments later turned out to market declines, meaning that contrary to predictions However as I'm sure the market will soon rise, then my second membukaposisi ie buy again.

So now my position open price is the average of the two prices of open positions were open.

When the market turning upside, and hitting the average opening price of second position, the position I had nothing to lose anymore, but even.
If the market continues to rise then of course my position greater profit.

Tips in performing averaging:

- For a market that moves according to predictions, averaging before the market did see the point of saturation.

- To market moves against predictions, do averaging when the market enters the saturated zone.

Averaging forex strategy is very helpful to minimize losses and maximize profits. In use we have to keep an eye on the condition of market saturation.

 

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