Trade Position Establishment, Initiation and Management Process

Three primary steps exist in the process of identifying a viable market position in the current Lexium Capital trading model. It is a common notion to categorise traders into either Fundamental or Technical by method. At Lexium Capital we strongly believe and have historically proven that the unification of both is imperative to achieve the consistency necessary to operate at a professional level in this field.
Step 1 - Fundamental

The first and most important step is to determine the fundamental outlook of the currency market as a whole. This fundamental outlook will provide Lexium Capital with the currency pair best suited for further analysis and vetting of a potential trade position. Scheduled economic news releases, geo-political factors and historical behavioural responses are all taken into consideration when establishing potential imbalances in weakness and strength in the Foreign Exchange Markets. The primary objective of this process is to establish not only a potentially under-priced currency but also a currency that may suffer from a fundamental shift or the continuation/acceleration of a fundamental force already in place.

Step 2 - Technical Analysis

Technical analysis is the process of analysing historical price movements with the intention of identifying specific price levels which offer low risk entry opportunities. Fibonacci Studies, Geometric Price Measurements and Time Cycles are some of the key strategies utilised in the identification of such price levels. Lexium Capital’s proprietary algorithmic technology provides an exceptional advantage in the field of technical level identification, allowing us to process a substantially higher amount of information in a timely manner.

Step 3 - Risk Assessment / Trade Management

If and when potential trade positions pass the rigorous fundamental and technical filtering mentioned above, the final step is to assess the risk and initiate the market position in order to express a carefully developed market outlook. Historically, trade statistics have proven that the identification of a trade position by way of Step 1 and Step 2 will provide a minimum of 55% trade success rate at a 1:1 Reward to Risk ratio. In order to maximise the profit potential, complex trade management is implemented during Step 3. Depending on the individual nature of the specific trade, positions can be broken up in smaller parts, each with differing stop loss and take profit targets, while the total capital risked per trade is assigned based on the statistically proven trade potential. All open trades are monitored closely. New information and/or volume entering the market is analysed and if necessary Take Profits / Stop Losses will be adjusted with the intention of reducing risk exposure and maximizing profit.