50 Pips A Day Forex Trading Strategy

The 50 Pips A Day Forex Trading Strategy is designed to capture the early market move of GBPUSD or EURUSD.

I’f you are looking for forex trading strategies that work, this trading system is one you should try it out for a few months because it has great potential.

If you go and open up your EURUSD or GBPUSD chart and go to the daily timeframe, you will see that these two currency pairs move more than 100-150 pips daily.

So this forex trading strategy is tries to capture at least half or one third of that daily price move in a much earlier stage before it actually happens.

Your trading orders must be placed at the close of 7am GMT candlestick ( 1 hour candlestick). Make sure that the time you see on your MT4 chart matches that of 7am GMT. If not, ask your forex broker.

 

SETTING UP YOUR CHARTS

Forex Indicators: none required

Timeframes: 1 hour only

Currency Pairs: Only GBPUSD and EURUSD

 

THE TRADING RULES OF THE 50 PIPS A DAY SYSTEM

  1. As soon as the 7am GMT candlestick closes, you have to place two opposite pending orders:  a buy stop order 2 pips above the high and and sell stop order 2 pips below the low of the 7 am GMT candlestick.
  2. When price activates one of the pending orders, you cancel the other pending order that has not been activated.
  3. Your stop loos should be placed anywhere from 5-10 pips pips above the high/low of the 7am GMT candlestick after it closes(or has formed). If you notice that the  7am GMT candlestick is too short and that placing the stop loss will be too close to the entry price, then increase your stop loss distance to anywhere from 15-20 pips.
  4. For take profit, set it at 50 pips.
  5. After you’ve done all the above, leave the trade to run. Don’t do anything.
  6. If your trade reaches it profit target for the day then awesome! Repeat the same process tomorrow.
  7. If you trade has a floating profit or a floating loss, wait until the end of the day and exit your trade, regardless of if you have a profit or loss.
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Lets look as some trading Examples, refer to chart below: each vertical dotted line  you see drawn on the chart  represents the 7am GMT time and they are spaced 24hrs apart ( 1 day).

50 Pips A Day Forex Trading Strategy

QUICK BACK TEST RESULTS

Referring to the chart above of EURUSD:

  • analysed the “what if” situation of the most recent 6 days that have passed on the EURUSD chart.
  • following the rules of the 50 pips a day trading system, there would have been a total of 6 trades (excluding the day that is now currently running) resulting in 4 trades becoming winners and 2 losers.

THE ADVANTAGES OF THIS 50 PIPS A DAY TRADING SYSTEM

  • you can only take 5 trades a week. The best thing about that is that you cannot overtrade, its 1 trade a day system, really.
  • stop loss distance is not too far because it depends on the length of the 7am GMT 1 hr candlestick. You will be looking at anywhere from 15-25 pips stop loss meaning your risk to reward ratio will be 1:2 or 3 at the most.
  • its a really good price action trading system.

Now you know the rules so why not go back to the  past, pull up your charts and do some quick backtests to see how this trading strategy stacks up?

Or if you are good at coding, why not create an expert advisor so that you man evaluate this trading system using a lot more price data from years prior?

 

DON’T FORGET!

50 Pips A Day Forex TradingSystem

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