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Forex Ladder

I unveiled a new online forex trading technique that I call “The Forex Ladder,” this is now a bonus course available exclusively to Hedge Report members.

We followed 2 currency pairs & made 245 pips profit with ONLY 10 minutes worth of work per day.  I’ll explain how below…

Buy Low Sell High

Any stock trader will tell you how to make money trading. You have to buy low & sell high. You can also sell high & buy low. In the forex the order you do this in isn’t important. It’s all about getting the right price.

The Forex Ladder

I’ve created a system that allows you to buy low & sell high, while simultaneously managing risk & reward. It’s ok to take on more risk if there’s a good enough reward for doing so.

What is the Forex Ladder?

Each day you log into your online forex trading account and place SIX entry orders. You do this at roughly the same time each day. It takes about 10-15 minutes and then you’re completely done until the next day.

Currency Pairs Followed

I’ve been developing the Forex Ladder for several years. For the first time ever, I shared the results with the LIVE Forex Training class that I taught.

Last week we followed the USD/JPY & USD/CAD. Here are the results:

USD/JPY Trade Results

On the picture below there is a green line to represent every time I went long and a red line to represent every time I went short. The thicker lines denote having bought or sold twice as many times at that price.

As you can see, there are more green lines lower (buy low) and more red lines higher (sell high). To see the actual profits on this currency pair for the week, please view the trade log below:

As you can see, these trades netted 287 pips profit in just one week of trading. The best part is this happened with only 10 minutes worth of work per day!

USD/CAD Trade Results

We also followed the USD/CAD last week. You can see the prices we bought & sold at in the image below:

This pair didn’t do as well, it actually sustained a small loss as you can see in the trade log below:

This pair lost 44 pips, which is modest compared to the MASSIVE 282 pip gain on the USD/JPY.

Overall Gain

Overall the Forex Ladder trading technique made 245 pips with less than an hour’s work in a week. This would have grown a forex trading account using proper money management techniques by 4.9%, which is fantastic for an hour’s worth of work.

Every trade was posted IN ADVANCE, BEFORE the trades happened, so this is proven to work.

The forex ladder technique is a bonus course in the Rapid Forex Hedge Report Member’s Area. This technique is not available anywhere else. I would love to share this method with you when you register for the Hedge Report today

 

 

 

 

 

Posted in Technical Analysis

Reward vs Risk for Forex Trading EXPLAINED

Lately I’ve been answering alot of questions about reward/risk ratios, it’s also part of the money management strategy taught in Forex Sailing.

Today I’m going to go a little deeper into this topic because it’ll help you understand online forex trading better.

Reward/Risk Ratio

Any time you place a trade, you should set a stop & limit. If you take the pips you will GAIN (if the trade goes well) and DIVIDE by the pips you can LOSE (if the trade fails), you get the REWARD/RISK Ratio.

This ratio gives you a percentage so you can understand the risk of the trade in a standard way.

Breakeven Analysis

Once you know the Reward/Risk Ratio, you can determine what percentage of the time you need to be correct to breakeven. If you’re right more than that you’ll make money. If you’re wrong more than that, you’ll lose money.

Let’s look at an example:

You find a Forex Sail. You determine that if you place a 100 pip stop and a 170 pip limit, you’ve got you’re trade. If you DIVIDE your potential REWARD by the total RISK you get 170/100 = 170%.

If we did many trades, here’s how we could breakeven:

1. Lose 100 pips 170 times = 17,000 pip loss
2. Gain 170 pips 100 times = 17,000 pip gain
3. Loss = Gain = Breakeven!

In this example there were actually 270 trades. We broke even when we were profitable on 100 of them. If we divide 100/270 (WINNING # of Trades / Total Trades) we get the BREAKEVEN PERCENTAGE.

In this case 100/270 = 37.04% is the BREAKEVEN PERCENTAGE

More About the Breakeven Percentage

If our trade works out more often than the BREAKEVEN PERCENTAGE we’re profitable as traders. In the example above we need to be right more than 37.04% of the time with that Reward/Risk Ratio…

Sounds good, doesn’t sound too hard to be right a little more than 1/3 of the time, right?

There is kind of a catch…a tradeoff really…

Breakeven Percentage Catch-22

The lower the breakeven percentage, the MORE LIKELY you are to be unsuccessful with your trade!

In our example the stop is much closer than the limit. Think about that for a minute…

If your stop is closer than your limit, you’re more likely to get stopped out, right?

The opposite is true. If the limit is closer than your stop, you’re more likely to hit the limit first.

Breakeven Percentage Chart

I’ve created a chart below with a few examples so you can see the pattern of Reward/Risk Ratios & Breakeven Percentages.

When reward = risk, you only need to be right half the time (50%) to breakeven (beige). This is common sense.

If reward < risk, you have to be right more often (light blue).

If reward > risk, you can be wrong more often (purple).

What Does This Mean?

In my next blog post I’ll be sharing more of what this means for making online forex trading decisions. For now, just think about the Reward/Risk ratio, and don’t make a trade without knowing what it is!

Posted in Technical Analysis

Forex Order Equity Management Tips

To help you completely understand the Forex game, I’ve been blogging about some of the forex basics.  Before you can start surfing the forex, you need a thorough understanding of proper equity management principles.

Staying in the Game: Practicing Sound Equity Management

It is important before you begin trading to learn how to manage your equity.

A large part of sound equity management is managing your risk.

The most important way to manage your risk is to set a profit limit order and a protective stop loss order for each trade you place.  Your trading software will most likely not require you to set a protective stop loss order and a profit limit order each time you enter the market, but doing so is crucial to consistent successful trading.

For each market order you set you will need one stop order and one limit order.

That means that every entry will have two exits.

If you you enter a long position (you buy) and you set one exit point higher than the entry price (that is your for profit limit order where you will sell if the prices reach that point) and the other exit point you set lower than the entry price (that is your stop loss order where you will sell if the prices reach that point).

This way, you minimize losses if you were wrong about the trade, and safeguard gains if you were right.

If you enter a short position (you sell) and you set one exit point above the entry price (that is your stop loss order where you will buy if the price reaches that point) and the other exit point you set lower than the entry price (that is your for profit limit order where you will sell if prices get to that point).

By setting to exit points for every entry you will minimize losses if you were wrong about the trade and safeguard gains if you were right.

When you buy above the market or sell below the market your order is a stop order.

The reason is this: if you place an order to buy above the market that means that your market order is a sell.  Your order to buy above the market is a stop order, which you set to minimize your losses should the market not go down, as you bet it would.

Setting a buy order above the market (a protective stop loss order) means that in each trade you make you will know in advance how much money you could potentially lose – because you do not have to place a market order to buy if the trade is going badly; that order is automatically filled when the market reaches that higher prices, it stops you out there.

In my next blog post, I’m going to talk more about market orders. Keep reading and you’ll soon understand the basic rules of the forex market enough to start trading like a super successful rock-star (we’ll get it it, stay tuned )

Posted in Forex Basics