Illegal forex trading strategy that some are still using. Would you?

Summary

In 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.