By turning on the averaging key , the opened position will be closed by averaging the position.
Why do most successful traders use averaging in the foreign exchange market?
The essence lies in simple logic… The fact is that the FOREX market is dominated by corridors, since the Central banks of countries keep their national currencies in a certain price flat, which will be beneficial for exports and imports.
If the currency is too expensive, then exports will also be expensive on the international market, and if the national currency is very cheap, then imported goods for the country’s economy can be very expensive, respectively.
Thus, the national banks of all countries need to keep a constant balance between exports and imports. The main levers of influence on the value of the currency are the regulation of the discount rate parameters, sharp and straightforward statements regarding their monetary policy, the purchase or sale of the national currency. That is why the corridor character prevails in the currency markets.
However, not all currency pairs can be corridor pairs and you should choose exactly those whose corrective movements are more than 50-60% of the impulse. Otherwise, you can “catch knives” instead of riding the wave of the trend.
The most interesting pairs to average
these are EURUSD, EURJPY, USDCAD, AUDUSD, USDJPY, CHFJPY, AUDCHF.
This strategy can also be applied to stocks, but mainly in buy positions, selecting stocks with further growth potential.
Visualization of the averaging technique on the chart
When averaging, we have the Plus parameter in the settings, which is added to the average price and becomes our Take Profit.
Order averaging parameters
Distance – distance in points between averaging orders
Step – distance in points from the opening price to the first averaging order
Plus – profit in points for averaging orders
Equal Lot – use the same lot for all averaging orders
Also in the properties of the adviser (call with the F7 key) you can adjust the following settings:
averaging factor. For example, if the averaging coefficient =1.3, then the risk of each subsequent averaging order will increase by this value.
Hand selection price of new averaging level= true/false
-function allows you to manually select the level of placement of averaging orders, even if you do not select the level where to place the order, the panel will calculate and place the order on its own based on the Step Distance and Distance settings.
Distance for notice new level averaging
– the distance for which you will receive a notification and the ability to change the next level of averaging where an additional order will be opened.
Close_order_after_M_DD = true/false
– if true, then when the maximum drawdown is reached, the specified percentage % in , loss will be covered.
The maximum drawdown parameter is set in this cell in % of the deposit, and will be shown on the chart using the red line Max_DD_line
If the price goes beyond this line, the opening of averaging orders will stop.
This is done so that you can understand what you are risking and at the right time either close positions with a loss or increase the drawdown for a given series of orders and continue to average positions.
Pause in hours after exceeding the drawdown
– a pause in hours after receiving the poppy event. drawdowns
– show the price line on the chart where the specified maximum loss will be located.
Maximum number of allowable averaging orders = true/false
if true then the averaging grid will be controlled by Max_Orders_in_Siries
Maximum number of averaging orders
– the maximum number of price averaging knees.
Distance Notice Alert/Notifications for averaging
Averaging_level_Notice_Push/ Email/ Alert
–push/email/alert notifications when it becomes possible to select the averaging level
Article how to average position correctly https://softimotrade.com/en/position-averaging-correct-use-in-trading-and-on-which-markets-it-works-best/