$500 return on $250 margin – not bad
As we all know, Forex offers an incredible amount of leverage that can offer both incredible opportunities for profit and loss. The key is to manage your risk through the use of hedging positions and stop losses and only trade high-probability, low-risk setups. Here’s a screen capture of a quick little trade I put on last night for the USD/JPY. An extremely strong trend channel formed on the daily chart. I narrowed the focus to define my entry by reducing the time frame of the chart down to 5 minute bars. As you can see from the screen shot, the trend wasn’t violated once and there were several touches. Not surprisingly, some touches were consistent with Fibonacci retracements, further confirmation that we have a continuation pattern emerging.
Right now, I’m up roughly 50 pips, which is about $540 on this trade. I traded 1 standard lot ($100,000 base currency) on 400:1 leverage, which is only $250 margin. So the rate of return on cash for this specific trade is 216% in about 9 hours.
Click for larger version
Recent Comments