Do 50 pips a day strategy work?
For trading major currency pairs, 50 pips a day Forex strategy is getting extremely popular among traders. With the help of this technique, traders can easily identify the early market move of their trading instrument.
But this trading strategy can be applied to the currency pairs of EUR/USD or GBP/USD. But if you still want to integrate your few more trading assets, you can experiment at a higher level with the 50 pips a day forex strategy.
Why 50 pips a day forex strategy is best for beginners?
The 50 pips a day forex strategy is best for beginners because it does not require any in-depth research or any sort of market analysis. Instead, you can perform it on simple terms to get an idea about how the indicators work. It even teaches you how to use or read various trading patterns or charts.
Essential rules to follow when using 50 pips a day strategy
The next step is to start trading once you get an idea about what 50 pips a day forex strategy is. There are few essential rules which you need to follow to perform this whole strategy successfully. Let’s discuss some of the rules below:
- You have to wait for the 7 am GMT candlestick to close down. Instantly open with the buy stop order having 2 pips above the high and then sell stop orders with 2 pips below the low.
- Prices will start to move towards low and high and will instantly activate a few pending orders. If you want, you can even choose to cancel the order.
- For managing risks, you have to use the stop-loss order, which is placed just from 5-10 pips above the high or low of the candlestick. Based on the candlestick length, the traders can even increase or might decrease the stop-loss distance.
- Your profit target should be at 50 pips.
- Repeat this whole process once again.
If the traders are bringing profit to you steadily, you can use this strategy each day. But in case the results start to float, you should exit the trade by the end of the day.
Pros
- This strategy is completely based on the rule of “set and forget”. Once you have set up everything, there is no need to change until the next day.
- You cannot over-trade through this strategy. Just two pairs of currency are used daily.
Cons
- This strategy is not suitable for daily trading. If you are fond of trading with different currency pairs, then avoid using this strategy.
- There is a certain limit on the profit with this strategy.
Bottom line
Well, this whole guide will be so much success for the beginners who are moving into forex trading for the first time. To win, you should try various markets and make sure you do not trade one side. 50 pips a day strategy is all about support and resistance, which are unique concepts in a forex market. So follow the basic rules which we have shared with you above and start trading right now.
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