Maximize Forex Profits, the Easy Way
Forex trading has taken this century by storm, with more and more people turning to forex trading as a means of earning extra income from home. Although forex trading can be very profitable seldom few make ongoing long term profits from this volatile market. It is common to hear about how traders have been in profit then the trade has reversed and lost all their profits and more. It is learning how to manipulate ones stop loss and percentage of profit taking that can maximize profits on the forex market.
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.
To make explaining this method as easy as possible I am going to use the popular currency pair GBP/USD. Imagine the trend of this volatile currency has just broken through a previous resistance level in a buy situation. You enter the trade as it makes a new high and it pushes you into 20 pips profit then the momentum slows down.
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.
FOREX: US Dollar to Extend Gains as Fading QE Hopes Stir Risk Aversion
Consumer Confidence Households (SEP)
UK Retail Sales rose 0.5 percent in September according to figures from the British Retail Consortium. BRC Director General Stephen Robertson said “sales growth continues to be poor…thanks to persistently weak consumer confidence and worries about the future.” Factoring out the typically volatile food sales, receipts fell from the previous year for the first time since mid 2009. Stephenson added that with the value-added tax] higher than it was last year, and pushing up sales values, September saw an even worse performance than headline figures would suggest. “Despite widespread discounting, sales of major items had the toughest time. It’s clear people are cautious and major spending is largely on hold,” he added.
Separately, UK House Prices continued to flounder according to a report from the Royal Institution of Chartered Surveyors. The survey showed that real estate agents reporting falling property values outnumbered those reporting gains by 36 percent in September, the most in 16 months. RICS spokesman Ian Perry chalked up the outcome to “the fresh influx of property to the market combined with a lack of buyers,” adding that a lack of confidence and mortgage funding are now “having a direct impact on house prices and property sales.”
Australian Business Confidence fell in September, reinforcing the downward trend in place since the gauge topped out in February. Details of the report proved mixed: sub-indexes tracking export sales and employment disappointed but overall activity surged to the highest in six months while forward orders increased for the first time since June. On balance, the outcome added to downward pressure on traders’ rate hike outlook, with a Credit Suisse gauge of expectations showing the priced-in probability of an increase at the RBA’s November monetary policy meeting fell for the third day to 42 percent. The Australian Dollar slumped against all of its major counterparts, down 0.6 percent on average.
Euro Session: What to Expect
The final revision of September’s German Consumer Price Index figures is set to confirm the annualized inflation rate at 1.3 percent, bolstering expectations that benign price growth will keep the European Central Bank on the sidelines for the foreseeable future. Indeed, a Credit Suisse gauge of priced-in policy expectations points to no rate hikes for the coming year.
Meanwhile, the UK Consumer Price Index is expected to print flat in September, keeping the year-on-year reading unchanged from the previous month at 3.1 percent. However, core CPI – a metric factoring out volatile items like food, energy and tobacco – is set to add just 2.6 percent from a year before, matching an eight-month low recorded in July. As with the German outcome, the reading is likely to reinforce monetary policy standstill as the uptick in inflation through the first half of the year appears to be unwinding as the Bank of England had expected. Scheduled remarks from the Bank of England’s David Miles – a known dove – may prove of far greater significance.
Turning to sentiment, S&P 500 stock index futures are tracking sharply lower, down 0.7 percent in late Asian trade and hinting at gains for the safety-linked US Dollar. The greenback had rallied in US trade after unexpectedly hawkish comments from newly minted Federal Reserve Vice Chair Janet Yellen weighed on hopes for renewed quantitative easing (QE). As we discussed in our weekly fundamental trends monitor, the prospect of additional stimulus is being seen as risk-positive, suggesting that the unwinding of dovish US Fed expectations is likely to weigh on shares as well as correlated currencies while boosting the greenback. Adding to Dollar’s momentum, the Fed’s perennial hawk Thomas Hoenig will take to the wires late into the session.
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.
To make explaining this method as easy as possible I am going to use the popular currency pair GBP/USD. Imagine the trend of this volatile currency has just broken through a previous resistance level in a buy situation. You enter the trade as it makes a new high and it pushes you into 20 pips profit then the momentum slows down.
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.
FOREX: US Dollar to Extend Gains as Fading QE Hopes Stir Risk Aversion
Consumer Confidence Households (SEP)
UK Retail Sales rose 0.5 percent in September according to figures from the British Retail Consortium. BRC Director General Stephen Robertson said “sales growth continues to be poor…thanks to persistently weak consumer confidence and worries about the future.” Factoring out the typically volatile food sales, receipts fell from the previous year for the first time since mid 2009. Stephenson added that with the value-added tax] higher than it was last year, and pushing up sales values, September saw an even worse performance than headline figures would suggest. “Despite widespread discounting, sales of major items had the toughest time. It’s clear people are cautious and major spending is largely on hold,” he added.
Separately, UK House Prices continued to flounder according to a report from the Royal Institution of Chartered Surveyors. The survey showed that real estate agents reporting falling property values outnumbered those reporting gains by 36 percent in September, the most in 16 months. RICS spokesman Ian Perry chalked up the outcome to “the fresh influx of property to the market combined with a lack of buyers,” adding that a lack of confidence and mortgage funding are now “having a direct impact on house prices and property sales.”
Australian Business Confidence fell in September, reinforcing the downward trend in place since the gauge topped out in February. Details of the report proved mixed: sub-indexes tracking export sales and employment disappointed but overall activity surged to the highest in six months while forward orders increased for the first time since June. On balance, the outcome added to downward pressure on traders’ rate hike outlook, with a Credit Suisse gauge of expectations showing the priced-in probability of an increase at the RBA’s November monetary policy meeting fell for the third day to 42 percent. The Australian Dollar slumped against all of its major counterparts, down 0.6 percent on average.
Euro Session: What to Expect
The final revision of September’s German Consumer Price Index figures is set to confirm the annualized inflation rate at 1.3 percent, bolstering expectations that benign price growth will keep the European Central Bank on the sidelines for the foreseeable future. Indeed, a Credit Suisse gauge of priced-in policy expectations points to no rate hikes for the coming year.
Meanwhile, the UK Consumer Price Index is expected to print flat in September, keeping the year-on-year reading unchanged from the previous month at 3.1 percent. However, core CPI – a metric factoring out volatile items like food, energy and tobacco – is set to add just 2.6 percent from a year before, matching an eight-month low recorded in July. As with the German outcome, the reading is likely to reinforce monetary policy standstill as the uptick in inflation through the first half of the year appears to be unwinding as the Bank of England had expected. Scheduled remarks from the Bank of England’s David Miles – a known dove – may prove of far greater significance.
Turning to sentiment, S&P 500 stock index futures are tracking sharply lower, down 0.7 percent in late Asian trade and hinting at gains for the safety-linked US Dollar. The greenback had rallied in US trade after unexpectedly hawkish comments from newly minted Federal Reserve Vice Chair Janet Yellen weighed on hopes for renewed quantitative easing (QE). As we discussed in our weekly fundamental trends monitor, the prospect of additional stimulus is being seen as risk-positive, suggesting that the unwinding of dovish US Fed expectations is likely to weigh on shares as well as correlated currencies while boosting the greenback. Adding to Dollar’s momentum, the Fed’s perennial hawk Thomas Hoenig will take to the wires late into the session.