Illegal forex trading strategy that some are still using. Would you?
Summary
TLDRIn this video, Rafael Zohovic discusses a controversial trading strategy involving two accounts on different brokers with high leverage. He explains how, during volatile market conditions triggered by news, traders can open opposing positions (buy and sell) to capitalize on market movements. Despite the risk of both accounts being closed if the market moves against one, this method can yield significant profits if correctly timed. Rafael emphasizes that while brokers discourage this strategy due to its potential for quick riches, it's not inherently illegal unless both trades are with the same broker.
Takeaways
- 📊 The strategy discussed involves using two separate trading accounts for high-leverage trading in volatile markets.
- ⚠️ This method is illegal according to brokers' rules, but the video suggests it's still possible to use it discreetly.
- 💰 The core of the strategy involves opening opposite trades (one buy, one sell) on two accounts during high-impact news events.
- 📉 One account will lose after a certain amount of pips, but the other will profit significantly due to the market's volatility.
- 💥 The strategy hinges on quick market movements after major news releases, where prices can shift by 100-200 pips.
- ⚖️ To avoid being caught by brokers, it's important to use two different brokers and maximum leverage to capitalize on small movements.
- 🧮 With high leverage, even a $100 account can open a significant position, like a 0.41 lot size, leading to potential large profits.
- ⏳ The key is to let the profitable trade run after the losing trade is closed, maximizing gains as the market moves in one direction.
- 💡 There are risks, such as market volatility causing both accounts to close out, resulting in losses on both sides.
- 📈 The strategy can result in significant profits, but it also comes with a high level of risk and is discouraged due to its illegal nature with brokers.
Q & A
What is the main topic of the video?
-The video discusses a potentially profitable but forbidden and illegal trading strategy involving two separate accounts.
Why is this trading strategy considered illegal?
-The strategy is considered illegal because brokers do not allow it as it could lead to quick profits for traders, which goes against the broker's rules.
What is the key requirement for the two accounts in this strategy?
-The two accounts need to be on massive leverage and should be with separate brokers to avoid being caught.
What role does market volatility play in this strategy?
-The strategy requires a very quickly moving market, often triggered by news, to make a decisive move in one direction within a short time frame.
How does the leverage work in this strategy?
-With high leverage, a small account balance can control a large position. For example, $100 can control $41,000 with a 1:500 leverage.
What is the significance of the 33 pips move mentioned in the video?
-A 33 pips move is significant because it represents the point at which the trade with the losing direction would be closed due to margin exhaustion, while the other trade would be in profit.
Why does the presenter suggest waiting after the initial 33 pips move?
-The presenter suggests waiting because the news that triggered the initial move could continue to influence the market direction, potentially leading to larger profits.
What is the potential risk of this strategy?
-The potential risk is that if the market moves in the opposite direction after the initial move, both accounts could end up losing money.
What does the presenter mean by 'reinvesting profits'?
-Reinvesting profits refers to using the gains from the successful trade to open new positions, potentially increasing overall profits.
Why does the presenter believe this strategy might not be illegal if done with two different brokers?
-The presenter believes that if the strategy is done with two different brokers, the chances of winning are 50/50, and the brokers would still make money from the spread, so it shouldn't be illegal.
What is the presenter's final advice regarding this strategy?
-The presenter advises viewers to be cautious and not to actually engage in this strategy, as it is merely being discussed to answer a question and provide insight.
Outlines
🚫 Forbidden Trading Strategy
Rafa Zohovic introduces a risky trading strategy that involves using two separate accounts on different brokers with high leverage. This strategy is against broker rules and is considered illegal because it can lead to quick profits. The strategy requires a volatile market, ideally reacting to news, to make a decisive move within minutes. An example is given using the British Pound and Japanese Yen currency pair, where one account would go long and the other short. The goal is to profit from the market's movement, which can be up to 200 pips or more, using the leverage to amplify gains while accepting the risk of one account being closed due to a small move against the trade.
📈 High Leverage and Market Volatility
The video explains how to use high leverage to one's advantage in a volatile market. It uses an example where a $100 account with 1:500 leverage can control a large position of $41,000. The strategy hinges on the market moving at least 33 pips to cover the cost of one trade, after which the other trade would be in profit. The video suggests waiting for further market movement after the initial 33 pips to maximize profit. It also mentions the potential for reinvestment of profits and the importance of understanding the risks involved, including the possibility of both accounts being closed if the market moves against the initial trade.
🎰 Casino-like Trading and Legality
Rafa discusses the legality and ethics of the strategy, comparing it to gambling in a casino where the chances of winning or losing are roughly equal. He argues that using two different brokers should not be illegal since the brokers still make money from the spread and one broker is not favored over the other. However, if the same broker is used, it becomes a zero-sum game where the broker stands to lose, which is why it is considered illegal. The video concludes with a call to action for viewers to like, subscribe, and comment on the video.
Mindmap
Keywords
💡Trading
💡Strategy
💡Leverage
💡Brokers
💡Volatile Markets
💡News
💡Pips
💡Spread
💡Illegal
💡Risk
💡Consistency
Highlights
Profitable but forbidden trading strategy using two accounts.
Strategy requires using massive leverage on both accounts.
Two accounts must be with separate brokers to avoid detection.
Optimal for highly volatile markets, especially during news events.
Traders open one buy and one sell position simultaneously, regardless of market direction.
Strategy sacrifices one account while leveraging gains in the other.
A 33-pip movement could liquidate one account while producing profits in the other.
After 33 pips, one account is closed due to margin exhaustion, while the other continues to profit.
Waiting for larger market moves post-news can generate more profit, extending gains up to 200 pips.
The strategy becomes illegal because brokers don't want traders using this leverage tactic.
High risk involved, as the market can reverse quickly and close both trades at a loss.
The approach relies on understanding volatile market reactions to specific news events.
Some variations of this strategy involve trading correlated currency pairs like Swiss Franc and Euro.
The strategy can backfire if the market reverses and closes both positions prematurely.
Although illegal with the same broker, the presenter suggests using different brokers to evade detection.
Transcripts
hello fellow traders it's rafa zohovic
and welcome to my channel in this video
i will discuss with you a very
profitable yet forbidden and illegal
strategy you can still do it but
remember that it's against the brokers
rules they don't want you to do that
because you would get rich too quickly
i'm inspired by one of the comments
made by
one of the subscribers who said
hi rafael i know someone using two
accounts for trading and yes this
strategy is based on two separate
accounts
and he always takes small profits
without losing but don't tell anyone
how he do this thing can you help us
with that i think it should be with two
accounts he don't tell anyone how he do
that so now that that's why you have me
here i will
tell you most likely uh how he do that
it might be a different strategy because
the one the strategy that i will tell
you about is not about small profits
about big profits so that's a little bit
uh
different
okay two accounts you need to have two
accounts
rule number one
rule number two
they both need to be on a massive
leverage
rule number three
they both need to be in separate brokers
otherwise you would be caught
rule number four you need a very
um
quickly moving market so you need to
need some news
the strategy is clearly for
for the very volatile markets
that will make a decision and it will go
in one choosing direction within
one minute let's say
so the news is the perfect
moment
how do you do that
here is the thing
we are on british pound of japanese yen
this is a five-minute chart you can see
that's eight o'clock if you look at the
bottom eight o'clock in the morning
there are some news
on the market and the market is reacting
to the news it's reacting and going over
in one move it's going over
100 pips if
we continue
this move further on
we can see that this move is
at the end of a day
four hours you've got already 170 pips
and later 200 pips so imagine you can
make 200 pips
but
how do you know which way the market
will go
here is the thing with two accounts you
don't need to know that
so you might be thinking like okay so
what you open one buy one sell so later
here are you winning there you selling
so you are on zero minus the
spread so you're basically losing
not if you are clever about it not if
you use the high leverage account
let's
jump into the leverage talking let's say
your account is one hundred dollars that
you are willing to sacrifice one hundred
dollars for the strategy
let's say your
currency is a british sorry it's a usd
so american dollar and the currency pair
as on the previous example
is british pound to japanese yen so with
leverage of one to 500 this is the
merging calculator
on 100
you can open
a 41 000 in units so that means
0.41 lot
and now let's have a look
if we go to the pip calculator how much
is worth one pip when we are trading on
41 000 so
0.41 and one pip is exactly three pounds
three dollars i'm sorry so what does it
mean
let's go back to our previous
charts
and let's remember three
pounds per pip
it's
and we traded
at this point at eight o'clock there was
a news
and we open an account open at two
trades one going
a
buy one going sell so after 33
pips
at this point
three times
33 it's 100 dollars
we are out of the buy trade about by
trade our margin is exhausted we don't
have any more money the broker is
closing our
account completely closing the trade you
don't have a trade anymore but the other
one
at this point
is
100 in profit
and growing and because this is the news
you are not closing after 33 pips
you are waiting because you know that
this news
is
is making new sentiment on the chart so
the movement the continuation of the
movement will be in hours maybe even in
days depends of what kind of
movements we are talking about i mean
what kind of news we talking about so in
this place here after 100 pips
so this is basically 2 4
6 7 35 minutes after 35 minutes you have
already 300 dollars minus 100 that you
on the other account minus 100 dollars
that you put on the other account
so you've got 200 in profits should you
decide to wait longer you remember later
on it was 200 you would have times three
six hundred dollars
lost
100
profit
600 dollars so
let's recap
two hundred dollars 100 in one account
100 and other accounts
maximum leverage that you can get
33 pips that's enough for the move
and then bang you are making quick money
if with this case quick money you can
even wait for the pullback like here
and then
reinvest it again reinvest your profits
and see what will happen if the movement
will be
going for longer you could make even
more money that way
so yeah it's illegal because
as i said the brokers
don't like it they give you the leverage
but they don't want you to use this
leverage in this clever way
they just want you to you know blow your
account hopefully trading one to five
hundred
but if you do it right if you use this
leverage in a in a right way
then
this is what it is
i think
referring to the comments that
your friends
he might be using either this strategy
or
there are another strategies as well for
like differences between two similar
currency pairs like swiss franc
with euro and
you can do some tricks over there as
well on two different accounts and make
small profits so each time you are
taking small profits and you are
building it's quite consistent
it's maybe less risky because in this
strategy you could lose as well in the
one that we
we this guy we discussed as well because
imagine that there is a high
volatility
so
for example we have something that
first the market makes a move of 33
pips
you acted too quickly something went
wrong
there was an initial reaction 33 pips it
closes your account
then it goes
another way
so triggers
another trait
and blows the second one as well
and then comes back in this direction in
the in the right direction so first it
would go the right direction
then it will go so it will close the
the buy the buy would be closed at this
point
later it will go again
up
it will close
the cell or opposite at the beginning it
can go up
close the cell and then
the buy would be in profit but then it
will retrace and it will go
lower close the buy and you will have
both
trades close so remember you need to
know what you are doing
plus i'm not advising you really to do
that
and this is just to answer the question
this comment
and
just to talk it's it's always it's
always interesting you know all this
all these strategies it's like in casino
you know there's like a little
percentage and if you take proper
advantage of it you can
um
you can make money especially that i
don't really think that it should be
should be so illegal if you are using
two different brokers at the same time
because if you think about that
you have 50 50 your chances of the
market going up or down is a toss of a
coin it's 50 50. so that means
that one time the bro this broker a a
will win
another time broker b will win because
there is no
no reason for you always to win with one
broker you don't know which one will win
so the brokers at the end of the day
they would have money from the spread
from your activities
so it shouldn't be legal it should be
legal if you are using
the same broker so
that's what they actually mean so for
example
me and you
we make a deal that i will put 100 you
will put 100 we both open in the same a
broker
the same trade i mean opposite trades at
the same time and then whoever wins
which we split the
the profits then the broker is losing
money it's like disadvantages for him so
that's that's why it's illegal but in
the other way
in my opinion nothing wrong with that
okay if you like this video please
watch one of these videos i'm sure you
will like it subscribe to this channel
thumbs up
leave me the comment i love your
comments guys even if it's a short one
it always
makes me happy so leave the comment and
until the next time
take care bye
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