The 10 Pips A Day Forex Trading Strategy is a simple forex trading system for beginners and even advanced forex traders.
Currency Pairs: only the major pairs
Indicators required: 5 ema and 12 ema and RSI 14 with level 50.
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THE IDEA BEHIND THE 10 PIPS A DAY FOREX STRATEGY AND THE PROBLEMS IT CREATES
What if you can only aim to make 10 pips a day? If you hit 10 pips for the day, that’s it…you are done, no more trading for the day.
Next day, you come and aim for 10 pips again. If you hit your 10 pips profit for the day, you don’t trade anymore.
This means that if you take the first trade and that first trade gives you 10 pips of profit, then you will not trade anymore because the whole aim of this trading system is to make 10 pips a day.
Now, the problem with this system is: what happens if your don’t make 10 pips during the day?
What happens if you have 10 losing trades in a row? Will you keep trading until you hit 10 pips profit for the day?
Well, if that’s the case, you need to make profit on the next 11 trades and it is the 11th trade that will give you the 10 pips you need for the day.
But then, that very thing is a big problem, because now you are confronted with the problem of overtrading and you really don’t know if the next 10 trades will all be winners…
So with this 10 pips a day forex trading strategy, in my opinion, you need to have a set limit on the number of losing trades in a row you can take before you say: “that’s it, no more trading for today.”
TRADING RULES OF THE 10 PIPS A DAY FOREX TRADING STRATEGY
- Sell when 5 cross 12 downside and RSI cross below 50
- place stop loss 2 pips above the high of the previous candlestick which was closed before the ema crossover.
- Take profit target is 10 pips
- Buy when 5ema cross 12ema to the upside and RSI crosses above 50 level.
- place stop loss 2 pips below the low of the previous candlestick which was closed before the ema crossover.
- Take profit target=10pips
DISADVANTAGES OF THE 10 PIPS A DAY FOREX TRADING STRATEGY
- you can’t use the 10 pips a day forex trading strategy on pairs that have huge spreads, you will get stopped out very easily.
- this is a trend trading forex strategy so if the market is flat, you’ll have a lot of false signals therefore I suggest you only use this strategy during the London and New York trading sessions.
- you are only restricting yourself to 10 pips profit per day when sometimes the trade you take, you will see later that it has moved 50 pips or 100 pips but you only got 10 pips profit.
- tendency to over trade if you are keen on getting your 10 pips a day which means you can blow your forex trading account easily if you do that.
ADVANTAGES OF THE 10 PIPS A DAY FOREX TRADING STRATEGY
- Its a pretty simple trading system to use for even beginner forex traders.
- works really well in strong trending markets
- 10 pips profit target is easily achieved compared to something like 50 pips profit target.
“Wide diversification is only required when investors do not understand what they are doing.” – Warren Buffett
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