Forex Trading Tips - Targeting 10 Pips A Day
By James Woolley
It’’s very common for people to start trading the forex markets with the aim of generating as many pips as possible. This will often involve opening lots of positions every single day. However this isn”t really necessary because if you increase your stakes slightly, then just a mere 10 pips profit per day could give you some very healthy profits.
This goal is a lot easier to achieve because all you need to do is to look for one solid trading opportunity per day. You don”t have to restrict yourself to one currency pair either because this high probability trade could be taken on any of the major currency pairs.
So what kind of strategies could you use to achieve this goal every day?
Well I personally believe there are two main methods you can use. The first one simply involves waiting for a quiet period of the day when several 5 minute candles, for instance, are very small, indicating a period of indecision, and trading the subsequent breakout. You could even use one or two technical indicators to help you confirm these breakouts.
Alternatively you could concentrate on trading those pairs that are trending strongly upwards or downwards. This is my preferred method because you have probability on your side when trading in the same direction as the overall trend.
The key is to use two or three different time frames, and then enter and exit your positions based on the shortest time frame. What you are basically looking for are solid trends (in the same direction) on the longer term charts, and a brief counter trend on the shortest time frame. Then you can open a new trade if the price continues in the same direction as the overall trend.
For example if the 15 minute and 1 hour chart indicates a strong upward trend, then a good trading opportunity may present itself on the 5 minute chart when the price is temporarily in a sideways or downward trend, before turning upwards again.
The point I want to make is that there are many ways you can generate a modest target of just 10 pips per day. Best of all you just need to find one high probability trade every day from any of the major currency pairs, which isn”t that hard to do in reality.
As long as you have a solid strategy in place, which will often involve trading price breakouts or trading only the strongest trends, then there’’s no reason why you cannot make solid profits day in day out. You don”t have to trade lots of positions or look for hundreds of pips per trade. You just need to target a small number of pips per trade and use a tight stop loss in case a particular trade doesn”t go according to plan.
About The Author
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