If you’d like to earn 30 pips a day then this 30 Pips A Day Forex Trading Strategy is a trading system you can try out.
In order to trade this system, you need the following:
- Indicators: You need two exponential moving average indicators for this trading system and they are used for trend identification: 10 ema and 26 ema.
- Timeframes: 5 minutes
- Currency Pair: GBPJPY only
You may also be interested about this true story: How Fred Made 1 Million Dollars Trading Forex With 40 Trades using a Simple 5 Minute Breakout Trading System And Lost It All
Table Of Contents
Background Of 30 Pips A Day Trading System
Basically, when 10 ema crosses 26 ema and goes up, that’s an uptrend. If 10 ema crosses 26 ema and goes down, that is considered a downtrend.
We know that GBPJPY is a volatile pair and price can travel on any given day from 100-200 pips. Therefore, the aim is not to capture all that price move during the day but just a little part of it, something like 30 pips and that’s where the 30 pips trading system comes in.
You also need to know something called the traders action zone.
Here’s the thing with trader’s action zone: it is a reversal zone…that’s where price is most likely to reverse and therefore this is the zone of buying or selling depending or what the market main trend is at the moment.
For example, if the market main trend is is down, there will be times when you will see price go up (even thought the main trend is down) and this is a minor rally in a downtrend market.
That price rally (upward price move) is most likely to end in a traders action zone when you will see price fall back down to follow the main trend.
A similar but opposite situation also happens if the market is in an uptrend. You will see price fall back down but this downward move is often temporary. As soon as price hits the traders action zone, it goes up to follow the main trend which is uptrend.
30 Pips A Day System Sell Setup
- you see 10 ema crossing 26 ema and goes down.
- you do not sell immediately when the ema have a cross over, you wait for a retrace.
- sell immediately at market when a candlestick crosses into the traders action zone halfway between the 10 ema and 26 ema.
- place stop loss at 15-20 pips
- take profit target is 30 pips
Buying Setup for 30 Pips A Day Strategy
- you see 10 ema crossing 26 ema and goes up.
- you do not buy immediately when the ema have a cross over, you wait for a retrace.
- buy immediately at market when a candlestick crosses into the traders action zone halfway between the 10 ema and 26 ema.
- place stop loss at 15-20 pips
- take profit target is 30-40 pips
Another Option To Trade The 30 Pips A Day Trading Strategy
- Once a candlestick enters the traders action zone, watch for a bullish or bearish reversal candlestick as your buy or sell signal.
- then place a buy stop or sell stop pending order above the high and low respectively.
- place your stop loss order a few pips below the high/low of that reversal candlestick once your order is activated but if you see that it is too close, then see if there’s a nearest swing high/low nearby where you can place you stop loss there.
Disadvantages of this 30 Pips A Day Trading System
- in an ranging or flat market, you will have many false signals.
- if you trade during the Asian trading session, you need to reduce your take profit target to 20 pips etc because generally, GBPJPY does not much much like it does on UK and New Your Trading Sessions.
- stop loss can be easily hit if its too close as the spread on GBPJPY currency pair can be 3-4 pips so when you place your stop loss using this system, you should be thinking about placin it in a place where it wont get hit easily.
Advantages of this 30 Pips A Day Trading Strategy
- volatile nature of GBPJPY forex pair means that profit target can be easily hit.
- in a good strong trending market, this trading system will work really well.
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