Martingale forex trading and Madam Lim Trading System.
You can get many trading strategies if you research at online. As many experienced traders use their own trading strategies, similarly there are many forex business organizations that establish their trading system with the combination of expert’s thinking. These trading system are not only uncommon but also effective. Today I will discuss about some strategy like these. If you want all of you can share your thoughts too. Today I will choose a common strategy to talk. This is about Martingale Trading system. Many of you understand it. In order to understand a little more you can see my post.
The Forex market is such a place where if you want to do profit then you must need to take risk. However, new research is going on how the amount of these risks could be reduced. Money management is quite important from this issue. There are several ways to maintain money management. Martingale is one of them.
What is Martingale system?
Experts use many kind of trading process in Forex market. Martingale trading system is one the effective process of them. This system is little bit spiny. If anyone starts works on it without understanding it properly then there is a risk of noise.
But I am telling it that, you have to be more deposit to follow this method. You can do trade using this method at a lower deposit, but in that case your profit will be lower. But the big advantage of this method is that, you will be able to recover your losses through this method.
Why one should use Martingale system?
Well, calculate one thing. How many of trades you profit and loss on average of 10 trades? Interestingly, most of the traders have been profiting in 6-7 trades on average. But many traders’ account becomes empty after facing many losses. So it stands that, the amount of loss is much more than profit. Do you know what the reason is? This is because we don’t follow money management process at all. It is seen that, if we make $60 profit in 2 trades but on the other case we are losing $200. That’s why strong money management will be the base of our system.
At first you have to be sure about one thing that, whatever yours trading strategy is, never loss 10 trades serially. It seems difficult to me to make loss in 10 trades. Even if you want, you can not make loss in 10 trades. You will surely be able to make profit once. Interestingly, in this martingale system if you could make a profit once your past losses will be recovered. Besides, there will be a few pins profit too. Therefore, if a trade loss once we will do double lot size trade at next. According to the calculation, as we can make profit at 6-7 trades out of 10 trades and that’s why this system has been arranged in this way.
How to do money management in Martingale system?
- Suppose, we have to open a trade paying $1 lot. After losing 50 pips we buy or sell the trade, but our loss will be $50.
- Next time we will open the trade with two times bigger lot size. That means it will cost $2 for every two pips. If there is to gain 50 pips, but will gain $ 100. Namely $ 50 is to recover the loss of the previous trading and the extra $50 is for the second trade.
- Now, suppose that we loss the second trade also then the amount of our loss will be $50+$100= $150.
- In the next time, we will open our trade by taking 4 lot. If we profit 50 pips then our total profit will be $200. That means it will recover $150 which is the loss of previous trade and rest ($50) is the profit of this trade.
- Thus, it will continue. As you will make profit once among this 10 trade so you will see the profit after recovering all the loss.
It would be clearer to you when you will see the image below:
One more uncommon but more effective trading is Madam Lim Forex system.
What is Madam Lim Forex System?
This trading system was invented by a woman which name was Madam Lim. It was named after by the name of Madam Lim. She and her son have been trading in this forex market for a long time together. They discovered such a system which is very effective but it’s much easier to follow.
What are benefits of this system?
- It is basically a modified hedging system. Although it is similar with the conventional market’s hedging system but the system of keeping lot size ratio is very unique.
- There is no use of custom indicators in this system. Common indicators which are easy to understand have been set up with the setting of this system.
- One more particular advantage is that you can do trade at any time of the day in this system.
How to understand signal:
You will take entry whenever you will see any change in the red or green colors of candle and after filling two or more times the color will be changed and then exit the position.
When and in what currency you can do trade:
- Basically, it will be better to do trade in 4 hours of time frame in this system. But it doesn’t mean that one should sit towards the monitor for 4 hours to use the system.
- If you do trade with these three currencies you will get the best output. These are: EUR USD, GBP USD and USD CHF.
Download the manual system and template: Madam Lim Trading System
One thing to keep in mind that, Martingale Money Management System is very risky but if you can do it properly it is safe. We will fix money management by dividing the account in different parts, so if you face loss accidentally 10 times at a stretch your account will never be zero. You can continue your trade in the same way. So there is a hope left for profit after recovering the loss.
No more today. I will share more system in the comment section.
You are invited to look after the threat daily. Thank you.