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FX TRADING STRATEGY


reduced leverage has advantages: it serves as protection against trading too many simultaneous boxes and the potential loss is significantly limited by smaller position sizes.


Example of a trade Figure 3: EURO/USD Chart


volatility. Even in long sideways phases, the hedge protects against large losses through a margin call. Nevertheless, the human factor is indispensable as a last resort in risk management. In very calm market phases, traders should not trade. Central bank meetings or announcements of important economic figures are oſten preceded by a longer sideways trend. It is better to profit from


the subsequent volatility in the market - through new figures or publications. For this reason, we do not trade around 15 minutes before and aſter important economic news. It is important to know these news, holidays and events. We are developing a tool that warns traders in case of upcoming announcements of a trade. Nevertheless, the trader still plays the most important role in risk management in our strategy.


New ESMA Rules Figure 4: Trade example


Not least, as a result of the “Swiss franc shock” in January 2015, the European Securities and Markets Authority (ESMA) will tighten the conditions for trading difference contracts with private individuals in the future. Te leverage in the Dax will be limited to 20 times and in Forex to 30 times. In practice, this would stop our strategy aſter three trades. We have therefore developed a defused multiplier so that private investors can continue to benefit from our TC24.BlueBox in the future. But a


38 FX TRADER MAGAZINE October - December 2018


1 - A trading range in the price is selected and with the SwissBox tool we place a pending order above and below the blue trading range with the same position size. (see figure 4, greenish zone)


2 - A sell position is opened at point 1. At the same time, the pending order on the other side of the range changes the position size.


3 - Te sell trade does not run directly to take profit (TP), but executes a buy trade at point 2. Trade 1 remains in the market. A new stop order is automatically placed on the opposite side.


4 - Te market turns its direction again before reaching take profit. At point 3 a new sell trade is initiated. Trade 1 and 2 are still in the market. Again, a new buy stop order is automatically placed on the opposite side.


5 - Te price movement develops. At point 4, all three current trades are closed. Due to the different position sizes, the trade as a whole is closed with profit. Te still open buy order is deleted.


Christian Schürholz Trader & COO TradersClub24


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