Profiting 200 pips from the forex market might seem rather out-of-reach for most ( including yourself perhaps ) if you have not been there done that. This logic is very simple to understand here – Considering a trader who can consistently nail an average of 200 pips from the forex market each week, this kind of profit target would not be overwhelming to him/her anymore. On the other hand, if you are the kind of trader who struggle to make 50 – 80 pips each week, this target of 200 pips might seem like an impossible target for you (at least for now). However, nothing is hard or impossible as long as you break down everything and try to understand the process in a simple manner – Likewise for this strategy on profiting 200 pips each week.
Let me share the details below:
In forex trading, being “consistent ” is really the key to succeed continuously month after month and for a long time to come. Nothing beats this fact I am sure. So instead of thinking how to make 200 pips each week, you just have to break it down into 40 pips a day instead. Not only is 40 pips a very achievable target, but it is also a ” realistic ” target as well. Why do I say so?
Because for almost all the currency pairs available for trading, their average daily pips range would be between 100 – 150 pips at least. Hence, when you are aiming for just 40 pips out of this range, it is definitely very do-able once you understand some proven facts I am sharing here. For this example, let me use the EUR/USD for my explanation of this strategy. This is one of the most commonly traded pair and the liquidity is definitely good.
Here are some tips for you to secure the 40 pips target with confidence:
1) Always Trade On The Bigger Time-frames Such As 1 hourly or 4 hourly
By looking at the bigger time-frames, you are actually looking at the ” bigger ” price projection in the market. Therefore, not only are you looking at more reliable signals & patterns formation from the chart, but also not that tiring after all as compared to staring at the 1 minute or 5 minutes charts instead.
2) You Should Trade With A Good ” Risk/Reward ” Ratio Of At Least 1.5x
Forex trading is merely a game of probability after all. As long as you lose less than what you win each time and simply rinse and repeat over many trades, you are going to be in the “positive” profits zone every month. So by applying a risk/reward ratio of 1.5x, you would plan your take profit at 45 pips (applicable for a pair such as EUR/USD) each time and stop loss at 30 pips. When you stick strictly to this ratio, each time you would win 45 pips but when you lose, it is only 30 pips.
Lose less and win more – That’s what I called it!
3) Learn Forex Trading Strategies For Both Sideway & Trending Market
In the forex market, it is either the market is going sideway (ranging) OR trending. And the beauty is that you can definitely nail those pips (profits) you need from both market condition once you have some strategies for each different market.
To truly put all odds on your side, it is no good to apply just one strategy to all market conditions as in this way, you would not be getting good results in the long run or maybe only “breakeven ” perhaps. So what you should do is to include good strategies meant for both the sideway & trending market in your trading basket. And the best strategies you should use would be based on Price Action itself.
This is because Price Action is not lagging and the ” hints ” you derive from the actual market Price Action is more reliable most of the time. On the other hand, when you rely too heavily on the so called ” textbook technical indicators”, you would suffer more confusions and uncertainty as they are generally plain lagging and not as reliable as compared to Price Action.
Having stick to these 3 proven tips, your effort to make 200 pips each week would not be such a challenge anymore. You would suffer some losses definitely, but if you trade just 2 times a day ( using TP 45 pips & SL 30 pips ) and your strategies are just 50% accurate – 200 Pips by the end of the week is very do-able indeed! So if you are keen on tuning both your mindset and trading skills to make 200 pips each week, do try out and get familiar with these 3 rules using a DEMO account first.
Once you can ” consistently ” get many repeated 200 pips each week, you can then proceed onto a Live trading account if you want. 200 pips each week would roughly equate to about 800 pips every month. Now do you know how much these kind of pips would help to grow your account size by only risking 2 -3 % each time? I would say, it is enough to make most traders around the world “filled with envy ” once they know about your success with forex!
Source by Aaron Tan Wei Ming