Maximize Forex Profits, The Easy Way PDF Print E-mail
Written by Adam Woods   
Saturday, 03 April 2010 17:01
Forex trading is fast becoming the most popular way of earning extra money from home this century, however seldom people know how to maximize their profits and limit their risks effectively enough that they get an 80% success rate. One of the biggest reasons for failure in the forex markets is being in profit at one point in the trade then seeing those profits and more disappear. It is not greed that is the cause of this, but simply not manipulating the stop loss in a way to maximise your profits and limit your losses.
by AdamWoods


Forex trading is fast becoming the most popular way of earning extra money from home this century, however seldom people know how to maximize their profits and limit their risks effectively enough that they get an 80% success rate. One of the biggest reasons for failure in the forex markets is being in profit at one point in the trade then seeing those profits and more disappear. It is not greed that is the cause of this, but simply not manipulating the stop loss in a way to maximise your profits and limit your losses.

The forex market like other markets moves in waves, and it is successful traders that use the new highs and lows of these trended waves as entry points and profit targets in there trading. It is proven that one of the safest ways to trade the forex market is to take a slice out of an already confirmed trend by entering on its upward or downward push. It is then the manipulation of the stop loss to lock in profits a limit risk that is going to see success in the long term.

As an example of this method I am going to use a scenario of the GBP/USD breaking through a resistance level for a buy trade. The GBP/USD has just broken through a strong resistance level of 16000; you set a buy entry point of 16011. Once your buy entry level has been triggered the trend continues on a 20 pip push then starts to stall or slow down around the 20 pip profit margin.

Now you have reached the 20 pip profit range it is often a time that the trend will reverse again before making another new high, you have to decide whether you want to take your profits now or risk them disappearing for good. It does not have to be as straight forward as taking all your profits in fact for successful traders it seldom is.

Using the example we started earlier you are now in a 20 pip profit situation with the trade starting to lose momentum. In this scenario I am going to tell you what I would do. I am trading at 10 a pip and I see that I am 20 pips in profit on a strong upward trend, but the trend is losing momentum so I take out 80% of my profits or 160. I then move my stop loss up to my entry level so the worst that can happen is my only profit is 160. In the likely event of the trend reversing back to just above its previous resistance (my entry point) and then continuing in the trended direction will see me maximize my profits at no further risk.

DISCLAIMER: This article is provided as information only and is not to be taken as financial advice.

Adam had been trading forex for years with little success. Adam originally had no experiance of the forex markets so hesigned up to Colin Atkin's selected members club. Colin is a professional trader who shares his trading live, all you have do is watch & copy what he does and take the profits. Since Adamsigned up to Colin he has had the money to invest in other projects.