Imagine stepping into the market with both a buy and sell position active when a currency is at a level of 100. As the price surges to 200, your buy position is sitting pretty with a profit of 100, while your sell position is taking a hit at -100. At this juncture, we start bending the rules of traditional trading. By cashing in on the positive buy, you add that 100 to your account, but now you’re left with a sell that’s down by 100.
Using a grid system means you need to capitalize on any movement in the market. So, let’s say you decide to dive back in with another buy and sell transaction. For simplicity, let’s assume the price drops back to 100.
Your second sell is now in the green at +100, while the second buy is down by -100. According to our strategy, you cash in on that sell, pocketing another 100. That brings your total cash-in to 200.
Now, remember that first sell that was hanging around? It’s just moved from 200, where it was down by 100, to 100, where it’s breaking even.
When you add up all four transactions, it starts to look pretty sweet: your first buy cashed in at +100, the second sell at +100, the first sell is breaking even, and the second buy is at -100. Overall, you’re looking at a tidy gain of 100. Time to close out those transactions and maybe even pop a bottle of champagne!
There are countless market movements that can transform this unconventional “buy and sell at the same time” approach into profit.
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