I've decided to start a thread dedicated to showing how to use high leverage to truly compound gains while still keeping risk at a minimum.
First off, before attempting, you need a good system which is already producing a positive expectancy as this is not a trading system, this is simply a way of making a lot more money with your current winning strategy.
Second, you need a high leverage broker, which means if you are in the US, you must go offshore. I have used several and now use one exclusively as spreads, commission and execution are far superior than any of the others.
This strategy will work with any winning system, however, you will see much better results with a trend following system.
So here goes: You will want to look for trade set- ups on the 4hr and daily, perhaps the occasional 1hr. This allows for larger take profit targets. Once you have identified your set-up, it is imperative you find your entry on the lower time frame (30m, 15m, 5m). This allows for much tighter stop loss. Price should have momentum going in the direction of the trade you have identified on the larger time frame. This is the hard part, if you can master this, the rest is easy.
Once you have entered the trade, there are 2 things which need to be done. The first is to watch the larger time frame you took the trade on to be sure the trend keeps it's momentum and does not show signs of reversing. Price resting is OK as long as no indication of reversal, as price will rest before next move in your direction. The second thing you need to be doing is looking for your re-entries on those lower time frames to compound your winners. YOU ONLY ADD TO WINNERS, never add to a losing trade. When adding, always move stops to break even creating a risk free trade.
You can make 1000-1500 pips on a 150-200 pip move using these techniques. Once again, the key is the leverage. If you enter a trade with 20:1 and compound 5 times, you will make 200-300% on ONE TRADE, keeping in mind stops are at break even from the first re-entry forward. This is why the high leverage broker is required, not for the first entry, but to use all the free margin the winning trades create once in profit.
I will post examples when I can, but I have recently began running several managed accounts as well, so time is limited.
This morning, I have taken an AUDJPY short on the 1hr @ 94.21, one entry so far, stop at be already.
First off, before attempting, you need a good system which is already producing a positive expectancy as this is not a trading system, this is simply a way of making a lot more money with your current winning strategy.
Second, you need a high leverage broker, which means if you are in the US, you must go offshore. I have used several and now use one exclusively as spreads, commission and execution are far superior than any of the others.
This strategy will work with any winning system, however, you will see much better results with a trend following system.
So here goes: You will want to look for trade set- ups on the 4hr and daily, perhaps the occasional 1hr. This allows for larger take profit targets. Once you have identified your set-up, it is imperative you find your entry on the lower time frame (30m, 15m, 5m). This allows for much tighter stop loss. Price should have momentum going in the direction of the trade you have identified on the larger time frame. This is the hard part, if you can master this, the rest is easy.
Once you have entered the trade, there are 2 things which need to be done. The first is to watch the larger time frame you took the trade on to be sure the trend keeps it's momentum and does not show signs of reversing. Price resting is OK as long as no indication of reversal, as price will rest before next move in your direction. The second thing you need to be doing is looking for your re-entries on those lower time frames to compound your winners. YOU ONLY ADD TO WINNERS, never add to a losing trade. When adding, always move stops to break even creating a risk free trade.
You can make 1000-1500 pips on a 150-200 pip move using these techniques. Once again, the key is the leverage. If you enter a trade with 20:1 and compound 5 times, you will make 200-300% on ONE TRADE, keeping in mind stops are at break even from the first re-entry forward. This is why the high leverage broker is required, not for the first entry, but to use all the free margin the winning trades create once in profit.
I will post examples when I can, but I have recently began running several managed accounts as well, so time is limited.
This morning, I have taken an AUDJPY short on the 1hr @ 94.21, one entry so far, stop at be already.
