Averaging Strategy

Averaging Strategies In Forex

To minimize losses when our position is in opposite direction to trend, and to maximize profit while positioning us in line with trend, we can use Averaging Strategy.

Averaging based on the meaning of the word is averaging. In terms of opening positions, the averaging strategy is useful for averaging the opening price of a position. Where at a certain level, regardless of market conditions the value of the position we open is IMPAS.

In trading, the meaning of Averaging is to reopen a new position in accordance with the old position even though the current price is moving opposite, in the belief that the market will soon move in accordance with our predictions.

Judging from its purpose, averaging strategy is used to:

1. Increase profits

For example:

I predict the market will go up, so I open a buy position.
A few moments later it turns out the market is rising, but I see the market will rise even higher. So I opened the buy position again.
Because I still think the market is very strong to go up again, I open the buy position again.

At the moment the market rises, now I have 3 positions that are buying profit. So if I close the three positions, my profit is more when compared with not doing averaging.

2. Accelerate Break-even in loss condition.

For example:

I predict the market will go up, then I open a buy position.
A few moments later it turns out the market is declining, meaning contrary to prediction. However, because I believe the market will soon rise, then I open the second position of the buy again.

So now the open price of my position is the average of 2 open open position price.

When the market reverses direction, and touches the average level of the opening price of 2 positions, then my position is no loss anymore but break even.
If the market continues to rise then of course my position is greater profit.

Tips on averaging:

- For a market that moves according to prediction, do averaging before the market encounters saturation point.

- For markets that move against the prediction, do averaging when the market enters the saturation zone.


Forex averaging strategy is very helpful to minimize losses and maximize profit. In its use we must monitor the condition of market saturation.

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— Monday, July 10, 2017 — Add Comment — Forex Strategy