Dear FX Top Gun,
In Secret #8 I told you about an old bit of wisdom from Granny that you should not be following. Today, I’ll talk with you about one that you should follow. “Don’t put all your eggs in one basket, boy… if the basket turns over, you’ll be left with nothin’ but raw scrambled eggs filled with chunky shells.” The power behind Forex trading is that you can manage your trades in countless different ways. For example, you can simultaneously set up trades with multiple lots… or you can take one lot and split it up into a number of different trades. Either way, you have the freedom to put your eggs in different baskets. So, if you lose on basket “A”, you might win big on basket “B”… or you may just come up even with the pickings from basket “C”. Let’s talk specifically about how you can do this and the ways that you can set up your trades to maximiz e your odds of winning… Forex “Profit Eggs” and Where To Put Them Use support and resistance levels such as Fibonacci retracement levels, pivot points and trend lines to determine multiple profit targets. Once you determine those potential profit targets, set your exits at each of these levels. For example, if the EUR/USD hits a support level at 1.3500 and you are looking to go long, find 2 to 3 potential profit targets above that entry price. - If there is a fib level at 1.3550, then that’s potential profit target #1.
- If a resistance pivot point is at 1.3600, that is profit target #2
- If there is a horizontal trendline representing a possible double top at 1.3700, that’s profit target #3.
Now, here’s how you could handle those trades so that your profit eggs are in multiple baskets… - If you were long on 3 lots, exit 1 lot at each of these profit targets.
- If you are only long 1 lot, then exit 1/3 of a lot at each profit point.
This money management strategy allows you to take more profit out of the market without any further risk. Once your first profit target is hit, move your stop to break even for the rest of the position. This assures you of a small profit while having a risk free shot at the higher profit levels. A Personal Example
Let me wrap up by showing you just exactly how I use this strategy… If I am trading a swing style (see Secret #20 for the profit power behind the “swing”) where I’m looking for longs on a dip in an overall up trend, I will draw a Fibonacci retracement from the latest high to that swing low and use the .382, .500 and .618 fib levels as my three profit targets. See how easy that is! You keep those profit eggs in multiple baskets and soon they’ll hatch into a grand lifestyle, full of profits and opportunity. .
Here’s To Your FX Trading Success,  DC Bonta, The world’s #1 FX money manager  ******************************************************************* Editor’s Note: In a rare move, DC Bonta has recently announced that he is going to offer 200 individuals the opportunity to have DC personally manage their FX accounts and trading. DC’s past 3 year positive return track record is: 301.7%, 305%, 343.5%. For details on this exclusive offer, click here now. *******************************************************************
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