Small lot with big profits

Here I want to discuss with you about the small lots and big profits, As you can see in the picture that the lot size is very small, this is a cent account and you can see that it is 0.50$ lot, which is equal to 0.05$ lot. 

Why I share this picture to you? because I want to tell you all that with the help of a good strategy and with patience anybody can make good profits with small capital and small lot, what was the strategy behind the whole scenario? What did I see? I am telling you in details. 

Actually I saw the psychological limit of the pair and made it in my mind that the EUR/JPY will not fall anymore, because there isn't any upcoming news in favor or Japan Yen, as you can see on the other chart, that is USD/JPY,  You can see that both of them are moving almost same, it means that yen is under pressure. So, its time to open buy order, but I opened only small lot, to make it long term, and that's why when market rose, you can see my profits in the above picture. but I haven't forgotten to use trailing stop in this strategy, and I will advice all of the people who are doing long trade, please use trailing stop, so that you may lose your money in case of market reversal. It is very much necessary, you can see the red line in the picture, that is indicating my trailing stop.

I think this is the best strategy for those who have small capital and want to do trade with minimum loss, I hope that will help my readers in their future trades.

How can you trade without investment?

If you are a new trader and you don't have money to invest in the market then you can trade in forex market without investment, you can trade in this market in three ways. 

Number one is open a demo account and trade in that account for the sake of practice, that will help you to understand the market behavior and the use of meta trader etc. for learning process. After learning by demo accounts, you can participate in demo contests where you can polish your trading skills and if you win the contest you may get bonus money to trade in real account with that money. Almost every reliable and renowned broker is offering demo contest to encourage traders to trade in real market as this market has become so much popular and attractive.

Secondly you can find through searching on internet, there are several brokers offer you no deposit bonus, where you can trade without investment, but there may be some restrictions, just like you will have to trade 5 to 10 standard lots, or you will have to double that bonus amount, but when you trade with those brokers who offer you no deposit bonus, beware of scam brokers, otherwise you will only waste your time with them, they will not give you money.

Third option is to bonus for posting, and this option is most popular nowadays, because you will need to only discuss with other traders or teach some newbies and get bonus money, and the admin of the forex forum will credit the amount of bonus in your real account, where you can trade with that money and you can withdraw the profits made by the successful trading over the bonus amount. I have found this third option very useful and I think if a trader or newbie accumulate bonus amount by just posting their comments and views regarding forex trading, then what you want more? I think every trader should try to teach others so that it will help him in his own trading.

If you want to signup with best forex forum then click here.

What is hedging?

What is hedge? so many people ask this question, and my answer for them is just opening two orders one is buy and other is sell with the same trading volume is called hedging, in simple words if you have opened a lot of 1$ size of buy, and you see the market is falling then you will open an order of 1$ lot size in sell, that step will neutralize your position and the fluctuation of market won't hurt your capital if your orders are open, I mean to say no stop loss nor take profit.

Some people say that it is to lock the position, yes they are right, this strategy locks the position, but sometimes it make you confuse that how to open that lock, so whenever you use hedge then you should know when to unlock that position and how to unlock, for example if we open an order of buy with 1$ lot size and see market is falling due to any reason, then it will reduce our equity quickly because of big lot size, to save our capital we will have to place another order of sell with the same lot size, that is 1$. Now, position has been locked, and market becomes neutral, now market is falling continuously, here you can take a chance, you can change the strategy. I mean to say that you can open the hedge if market is falling continuously. How, you may close the existing buy order and let the sell order open to make you profits.

Or you can do another thing, if you see market is falling then place another sell order similar to existing lot size or just reduce 50% of lot size to secure your capital if the market reverse. But whenever you trade in the market, it is very much necessary to focus on market trend.

What are strategies?

Well, there are a lot of strategies available on internet, mostly traders make their own trading strategies, according to their trading style, but in my view, the most popular strategies are only a few, in which most popular strategy is "SCALPING". 

Scalping is the most attractive and useful strategy I have found in forex trading, but I will not recommend anybody who is new in forex market. This is because it is very risky strategy. In this strategy you take only a few pips in profits, you don't wait for more, usually traders do it in neutral market trend, or sometimes traders do it when they see the market is moving between 20 to 30 pips, I personally do it while the market is moving between 20 pips. I don't wait for market rise up or fall down, when I see 2 to 3 pips in profits then I close the order, I usually try to swim according to stream, and it is better.

Other types of strategies are long term, short term, inverse trading, reverse trading, medium terms etc. These terms of strategies are popular, but I would like to inform my readers that read and learn all the strategies, but use them in demo account first, and after using them, try to memorize them, and you should be a sharp mind if you are trading in real market, because the real market involves your own money, and if you are trading in real market then you should prepare your mind for any kind of market bounce or reverse. 

Learning several strategies and changing them according to market trend is recommended. It will get you near to success and you will be able to understand the market trend. Although understanding market trend is not an easy task to do, but it will become easier day by day. 

In the short term you can be dependent upon news, usually I have seen that news impact on market partially and the impact usually reverse if the buyers / sellers are strong. So at that time short trades are recommended according to market trend.

In the long term, you open order according to signal and use big targets, in which you use trailing stop as target one to secure your orders and capital.

Why should we practice in demo account?

The title is simple, a question and suggestion is behind that question, usually people don't want to waste their time in learning process and they just want to make money from forex market, they don't want to learn more, they just want to have the basic knowledge of meta trader, they don't even know all the options in the meta trader, they don't even know the difference between meta trader 4 and meta trader 5, but they enter in forex market and try their luck.

Actually, if you have a mentor or a good teacher, then you will understand the importance of demo accounts, because in demo accounts, newbies can trade without investment, and new traders can try new strategies and expert advisers (robots) without any risk, because demo accounts are based on virtual money. So, nobody can deny the importance of demo account. 

Now, the question is, how much time a newbie should do demo trade? The answer is simple, a newbie should learn all the basics and then try to understand how to trade, all that can happen in demo account without any cost. After knowing how to trade in live market, a trader should learn some strategies, that are very much necessary to get success in forex market. After learning, practice is necessary, so demo account is suitable for practice. There are several strategies available in different forums, learn them and try on demo account.

What are benefits of trailing stop?

Trailing stop is the option that we use to secure our profits and minimize the loss in our trading, whenever we open medium term order then we can use trailing stop to secure our order, you can find this option by right click on your existing order as you can see the picture below:

Here you can see the trailing stop and the options available with trailing stop, actually we set the points or pips to secure our opened order for sudden market bounce back. for example, if you use 15 points, then you will see that when market move more than 15 points in your order favor then you see a red line just after your order, this is actually a stop loss, and if the market will reverse then your order will close on that limit. Sometimes it cause you profits and sometimes it secure your order to go to negative and secure your capital with sudden fluctuation. Now a question arise, if it is stop loss then why not set stop loss manually, what is the need of trailing stop? So, I would like to tell you that when you set 15 or any points of trailing stop then after those pips you will see red line, and if the market continues its movement in your favor then the red line or stop loss will automatically move with the difference of 15 or the points you set. if you set more than 15, like 25 or 35, then you will see that if the market move between 34 points nothing will happen, and after 35 points when the market move one pip, the trail stop will move one pip. you can say it is an emergency break. But it is for medium or long term tradings, not suitable for short or scalping.

What is buy stop, sell stop, buy limit and sell limit

This is a question that people ask, but they don't use it in their tradings, mostly people use only buy limits and sell limits, but it is very important to know about buy stop and sell stop, there is a little difference between these two options, but when you are trading in market then you will find them very much useful. Let me explain in my simple words, hope that it will be useful for you.

When you open order you can find pending order, in pending order, you can see these options in "type" box, first option will be buy limit, second sell limit, third buy stop and forth will be sell stop. 

The simple definition of buy limit is, you want to open order when the market is up and expected to fall and bounce back, so you place buy limit below the current market price, similarly, you set sell limit above the current market price. While you use buy stop when market is moving up and you want to open order on rising market. Similarly, sell stop is used to place pending order when market is falling and you want to place pending sell order. 

Let see it in simple example, if the market of eur/usd is on 1.3074 and you think that market will move up, so you can open order by instant execution or just use buy stop but remember you can set buy stop after the spread quantity pips, as you can see the last sentence in the picture above. You can not set buy limit above the current market. The difference between limit and stop is just above the current price and below the current price. The option buy stop and sell stop are useful when you see an economical news is expected and market may bounce face, then you may use buy / sell stop to get benefits from that bounce.