Is Never closing any trade - a good ::idea:: ?
A trader decides he never wants to close any trade taken in his account , rather increment the lots by locking the existing position and trading the other side?
Sounds confusing enough huh?
Nevermind, this thought was going around my mind for quite some time i.e assume you have a trading system which you are confident of generating +ve pips at the end of the year . Now you decide to do something like this as illustrated in below example:
a) Lets say you get first signal to buy say eur usd @ 1.2700 & you are LONG 0.01 lot which you hold tight till you get sell signal
b) Now you get sell signal on eur usd per say @ 1.2980, take 0.04 lot SHORT without closing existing 0.01 LONG and going for the second signal (sell) with additional 0.03 lot
and wait for next buy signal and so on..
Trade history might look like this :
BUY 0.01 EUR USD 1.2700
SELL 0.04 EUR USD 1.2920
BUY 0.07 EUR USD 1.3010
SELL 0.1 EUR USD 1.3250
BUY 0.13 EUR USD 1.3172
SELL 0.16 EUR USD 1.3650
etc...
Assume your trading system generates about 450pips -500pips on eur usd yearly trading basis overall,with no orders closed you seem to gain cumulative on the profits made aswell as when you close down all the trades at the end of the year I see another edge i.e getting significant $$ cashback rebates back aswell for the lots traded so far.
Any thoughts welcome, if its sensible to do this or its not worth it unless you have good profitable % system..
-Scoobi
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