What is the 50 Pips a Day Forex Trading Strategy?
The 50 Pips a Day Forex Trading Strategy is a trading technique whose profit target is only 50 Pips a day in a single trade then calling it a day.
The Strategy is based on a one hour candlestick chart time frame and the London Session breakout.
The rationale behind this trading strategy is to catch the early long market moves of major currency pairs of the London Forex Session like the EUR/USD and GBP/USD.
Note that the London Forex Session is one of the sessions when most people prefer trading.
This includes the major players on the markets who play a major role in moving the markets, thus creating much market volatility – we need this volatility to earn 50 Pips.
This trading strategy does not employ the use of any technical indicators.
It purely relies on price action. You only need to choose a major currency pair on the London Forex Session which has a good daily range and that will be it.
The London Forex Session opens at 7:00 AM GMT and closes at 3:00 PM GMT.
Use a Time Converting Tool to know the exact time the session opens and closes in your country time.
Everything we will do will be after the 7:00 AM GMT (or its equivalent depending on your country time) candlestick is complete.
Other Currency Pairs you can trade using this strategy include;
Trading the 50 Pips a Day Forex Trading Strategy in Olymp Trade.
We have clearly introduced what the 50 Pips a Day Forex Trading Strategy is, when to trade and what to trade. We now need to get into the depth of how to trade this strategy.
How can you actually make these 50 Pips a day trading such a strategy in Olymp Trade?
Let’s find out.
Trade the 50 Pips a Day Forex Trading Strategy in the following simple steps;
- Choose a Major Currency Pair.
- Set your Candlestick Chart Time Frame to 1 hour.
- Wait for the London Session to open and the first-hour candlestick to close.
- Place Buy and Sell Stop Pending Orders.
- Adjust your Stop Loss.
- Adjust your Take Profit.
- Wait for a breakout to happen in either direction.
- Cancel the Pending Order not Activated.
- Repeat the next day.
1. Choosing a Major Currency Pair.
Our 50 Pips a Day Forex Trading Strategy is based on the London Session breakout.
We need to choose a major currency related to the London session. We’ve already listed them above and hinted that the major ones can either be the EUR/USD or the GBP/USD.
Choose a major currency pair in those lines.
2. Set your Chart Time Frame to 1 hour.
We mentioned in the introduction that the strategy is based on a one hour candlestick chart time frame and London Session break out. You, therefore, need to adjust your candlestick chart time frame to 1 hour for the best performance.
Where technical analysis is a big deal, actually one-hour candlesticks filter out most market noise making analysis easier.
However, we are only concerned with price action and not much analysis here.
3. Waiting for the London Session to Open and the First hour Candlestick to close.
We said that the London Session opens at 7:00 AM GMT. You, therefore, need to convert this time to see what time it is in your country.
After that, you wait for the candlestick of that first hour (7:00 AM GMT or its equivalent depending on your country time) to close.
Our Market Entry will be based on this first-hour candlestick. The price can either move up or down with respect to this first-hour candlestick’s high and low.
Therefore, the high and low of this first-hour candlestick will play a key role in determining the market entry points.
4. Placing buy and Sell Stop Pending Orders.
Place your Buy Stop Pending Order 2 pips above the high of the first-hour candlestick. This is in case the price breaks out of the first-hour candlestick’s high upwards.
On the other hand, place your Sell Stop Pending Order 2 pips below the low of the first-hour candlestick. This will be for a breakout downwards from the first-hour candlestick’s low.
Your pending orders are 2 pips away from the high and low of the breakout candlestick and safe from fake outs. If the price moves to the point of activating either of them, then chances are, it will continue moving towards that direction.
5. Adjusting your Stop Loss.
For your Buy Stop Pending Order, place your Stop Loss at least 5 pips below the high of the first-hour candlestick. For the Sell Stop Pending Order, place your Stop Loss at least 5 pips above the low of the first-hour candlestick.
6. Adjusting your Take Profit.
Your Target Profit as well set out by the name of this trading strategy is 50 Pips without question.
7. Waiting for the Breakout to happen in either direction.
Remember we set two pending orders.
A Buy and a Sell Stop Pending order. This is because the breakout can occur in either direction – upwards or downwards.
An upwards breakout will activate the Buy Stop Pending Order while a breakout downwards will activate the Sell Stop Pending Order.
8. Canceling the Pending Order not Activated.
Only one of the pending orders you placed will be activated. When one is activated cancel the other immediately.
9. Repeating the next Day.
The Strategy involves placing a single trade daily. You can, therefore, repeat the above steps the next day to make another 50 Pips.
Note – If during a specific trading day neither your Take Profit nor your Stop Loss order is activated, wait until the day ends and exit the trade, whether on profit or loss.
A simple Forex Trading Strategy worth a whole 50 Pips!! Apply it on your trading in Olymp Trade to earn those 50 Pips daily.