Well I am not sure whether I get it right or not.
Since there is a floor on EUR/CHF (1.2). If I grid EUR/CHF, does it mean I will surely gain profit.
I mean whenever it goes down, I buy. Do I have to set stop loss?
Same for USD/JPY, I may grid it as well
The only thing SURE about your method is that it will loose you money…
You may get lucky a few times but one of the BIGGEST sayings among pro analysts is “Don’t try and pick tops and bottoms where price may turn around, if price is moving in one direction, it will most likely continuing moving in that direction. Only trade in the direction of current price movement”
There are some Range Trading strategies which function well trying to predict turn-around points…
But your method is called “averaging down” and almost always fails in the long run. Historically, “averaging down” may even be considered the single biggest mistake made by noobs and pros alike. I read a currency trading book on how the lead trader of the government Bank of Australia averaged down, ended up loosing BIG TIME… Career-ruining mistake… The funny thing is, he averaged down for MANY MANY MONTHS and as soon as he took his big loss, 2 weeks later, price moved in his direction. What a HUGE failure!
ALWAYS have a stop-loss, this is trading 101… Without a stop loss you run a big chance of LOOSING ALL OF YOUR MONEY VERY QUICKLY.
Click the “School” Tab at the top of this webpage, try to learn a few things…
I can see an excellent entrance to the EUR/CHF market after passing/ the 1.123364 level. The price will go up.
I can’t see a favorable opening for a deal right now. Therefore, I’ll wait to see which of the variants is the right one.
