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October 15, 2020
Like in a battlefield, a forex trader needs a professional forex strategy to deal with the volatile forex market. Of course, this strategy must be matched with the current conditions. In
forex trading, a special strategy is required when entering the market.
This strategy is included in the risk management section or what is commonly referred to as risk management. There are various forex strategies, for example, a cut loss strategy,
switching strategy, hedging strategy, moving stop loss, and multiple lot strategy.
Moving stop loss is a risk management professional forex strategy that is used when we are a trend follower. As the name implies, moving stop loss means moving the risk level
according to the trend movement. The principle of moving stop loss is similar to a trailing stop.
The weakness of the trailing stop is the problem with the internet connection if the connection is problematic and the meta trader in a laptop or computer must always be in a running
system state. Salmamarket forex broker recommends moving stop-loss strategy to minimize these weaknesses.
This strategy relies more on a trader's ability to assess market risk. For example, you take a buy 1 lot at the price of 100 with a risk of 50 pips. Then the price went up to 300 which
finally corrected to 200 and went back up towards 500.
From the illustration above, you can apply a moving stop-loss strategy in the correction area, which is in the range of 200. So, that your profit can be maintained. If it turns out that the
price goes up again, you can place your stop loss at the next correction.
Based on this strategy, your profit in the long term will be determined by how long the trends are. A trend movement with only a few waves will usually result in losses even if the risk
value has been minimized. Use a multiple lot strategy to avoid this.
Many people, without professional forex strategy, are mentally unable to hold a trading position are experiencing a loss. However, allowing profit from an open position is also not an
easy thing. Imagine a situation where a trading position is profitable in a short time.
Then the price movement enters the correction phase and reduces the profit on the trading position. On the one hand, you definitely want to maximize your trading position from the
possibility of a continuation of the trend.
But you also don't want to let a position that has already experienced a profit turn into a loss. The solution is to use a multiple lot strategy. Using this professional forex strategy, we are
using a transaction volume that can be broken down.
When the trading position is already profitable, we can take some and leave the rest in anticipation of a bigger move. For example, you take a buy position of 4 lots at the price of 100
with a risk of 50 pips.
Then the price rises to 300 which eventually corrects to 200 and goes back up towards 500. From this illustration, you can apply the multiple lot strategy when the price reaches 300.
Then you can close 2 lots or half of your trading position.
Then when the price corrects and then rises back to 500, you can close half the lot of your remaining position. This strategy can be combined with a moving stop-loss strategy. But to
carry out the strategies, you must combine it with a risk to reward ratio.
Risk to reward ratio is the ratio between losses received and profits earned. By applying a bad risk to reward ratio, it means that you are willing to bear a greater amount of losses of the
odds. It is the secret of the best forex broker.
So, use the strategies above with a good risk to reward ratio, namely, the profit target is greater than the stop loss. Any forex strategy still has to be balanced with a good risk to reward
ratio, that way you have implemented a professional forex strategy.
Salma Team
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