Forex trading can be a lucrative and exciting activity, but it also carries risks. One way to mitigate those risks is by implementing a well-thought-out trading strategy. One such strategy is to place orders with doubling lot size if the current order is lost. While this approach can be profitable, it is important to understand that it is also a risky strategy that should be used with caution.
The rules of this strategy are straightforward. The trader places an initial order of 0.01 lot size, with a take profit (TP) and stop loss (SL) of 30 pips each. If the trade is profitable and hits the TP, the trader takes the profit and closes the position. However, if the trade goes against the trader and hits the SL, the trader places another order with double the lot size (0.02), with the same TP and SL of 30 pips each. The trader continues this pattern until the trade hits the TP and takes the profit, or until the maximum order limit is reached.
There are some important considerations to keep in mind when using this strategy. First and foremost, the trader must be disciplined and stick to the rules of the strategy. Only two orders can be placed per day, and the doubling of the lot size must be consistent. Second, the trader must carefully manage their risk. Doubling the lot size can increase potential profits, but it also increases potential losses. The trader should only risk an amount they can afford to lose, and should consider setting a maximum order limit to prevent significant losses.
Another factor to consider is the market conditions. This strategy may work well in certain market conditions, such as when there is a strong trend in a particular direction. However, it may not work well in choppy or volatile markets, where the price may move up and down frequently, hitting the SL and triggering additional orders. Therefore, the trader must carefully assess the market conditions and adjust their strategy accordingly.
It is also important to note that this strategy is not suitable for all traders. It requires a certain level of experience and risk tolerance. Novice traders should start with a more conservative approach and gradually build up their skills and experience before considering more aggressive trading strategies.
In conclusion, placing orders with doubling lot size if the current order is lost can be a profitable strategy in certain market conditions, but it is also a risky one that requires careful consideration and risk management. Traders should be disciplined, manage their risk, assess the market conditions, and only use this strategy if they have the necessary experience and risk tolerance.
