Very often, after the first open order brings the novice Forex trader some profit, he has a strong will to open another one or even several ones. Filled with enthusiasm, overconfidence and pushed forward by greed, he is sure that is "his day". Unfortunately, often it leads straight to the opposite results.
But this does not mean that such a course of action in the market will certainly lead to failure. The bottom line is that for this kind of action is necessary to have a very clearly defined strategies, a sober assessment of the market situation and the relevant technical indicators.
Below, we have decided to bring the basic conditions under which there is a sense for Forex trading with multiple open orders:
- You can open an additional orders at the medium and long-term trading, since in the short-term trading (for example, scalping) you are likely to not only get the much desired extra income, but also lose the existing one;
- You should have a clear set of technical analysis signals confirming the existing trend;
- You should have favorable financing opportunities. Your total volume of open positions should not be too large. Also, you must always bear in mind the possible correction of the motion of a particular currency pair.
- You should have technical availability to very quickly close all trading positions in an unfavorable development of the situation on the market. This may be a special feature for trade in one click or a specially designed script for trading on Forex.
- Even if all the above conditions are met, it’s not desirable to open more than three trading positions simultaneously. Trend is a quite changeable thing and each extra added trading position may cause losses.
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GBPUSD – October 10th 2014
USDCHF – October 7th 2014