Hello my Savages are you hungry?
Today I am going to tell you a story of a guy names Ricardo who managed to earn $1,000,000 with just 40 trades. Very impressive, I agree. Here is one of the strategies he suggested. Its called a 30 pip a day forex trading strategy. You know the GBP/JPY is rather volatile currency pair that can make big swings from (100-200 pips). So our aim is not to capture all this price margin in the course of a trading session but just 30 pips. Once we are done with embellishment of a story we can proceed to real things- the description of the strategy.
1.Choose GBP/JPY currency pair
2. Switch to the 5 minutes screen
3.Add some indicators to your chart: 10 and 26 exponential moving averages( EMA)
How to trade
IF 10 EMA intersects 26 EMA and goes up, we are facing an uptrend.
If 10 EMA intersects 26 EMA and goes down, there is a downtrend.
After we found the EMA’s crosses we should identify traders action zone( reversal zone a zone of buying or selling depending on what the markets main trend is). It occurs at the end of the minor rally in the dominant bullish trend.
Imagine that the market main trend is down, there could be some minor rally in a downtrend market. That price rally(short-term upward price move) usually ends in a traders action zone when the price starts falling in the direction of the main trend again. A similar in logic, but opposite situation also happens if the market is bullish.
Your action in the case of a downtrend:
You notice that 10 EMA crosses 26 EMA and goes down.
You don’t sell immediately after the formation of the cross: you should wait for a retrace.
Then, you sell immediately when a candlestick gets into the traders’ action zone halfway between the 10 EMA and 26 EMA
You place stop loss at 15-20 pips
Your take profit target is 30 pips
Your actions in the case of an uptrend:
You notice that 10 EMA crosses 26 EMA and goes up.
You don’t buy immediately when a candlestick gets into the traders; action zone halfway between the 10 EMA and 26 EMA.
you should place stop at 15-10 pips
Your take profit target is 30-40 pips