TWENTY POINTS EACH DAY: WELL-TRIED FOREX TRADING STRATEGY

The 20-points profit each day with the proper money management system can make you a millionaire. So how to find a way of trading that will provide a daily (albeit small) but stable profit on the Forex market? Such a strategy does exist and according to reviews of the traders using it, this strategy can bring a profit of 20 points per day!

RULES YOU NEED TO FOLLOW

First, we should say that the 20-points-a-day trading strategy is not something new on the Forex market. Generations of the traders have been using these trading approaches for quite a long time. So the mechanism of this strategy is not a day-fly and it is time-proved and should work in the immense future.

 

IMPORTANT PECULIARITIES

This strategy works at the most volatile time of day, which is after 14:00 Moscow time. Before starting the trade, you should look into the macroeconomic Forex news calendar. If the news is to be published after the time you plan to start trading on the system, you do need to wait for them to come out first.

According to the Forex traders’ reports, you should start trading from 15:30 GMT+4 time on the days when such important news are to be published. This is the time when the US stock exchange Forex platforms open, that is when the volatility of the trading assets reaches the maximum levels.

You should trade using this strategy until 18:00 GMT. After that, the Forex market becomes flat, which can last until the next trading period

The strategy can work on several currency pairs at once, which diversifies the trading risks.

The experience of many generations of the traders has proved that you should avoid completely trading on this system on Mondays. The economic calendar is usually empty on this day of the week and the entire foreign exchange market is flat, which will bring you nothing but losses.

 

PREPARE “20-POINTS-A-DAY” TEMPLATE

To prepare a trading template, apply the following Forex trading asset indicators to the chart:

  • SMA — the period of 20.
  • Momentum – the period of

That’s how the template of this trading system looks on the quotes chart. Simple and nice!

20 pips a days strategy

You shall use the M30 timeframe for trading on the system. You may pick any Forex currency pair of high-volatility and small spread. As practice shows, this strategy demonstrates the best trading result on the GBPUSD and USDCAD currency pairs.

TRADING RULES

The trading strategy works out as well as it sounds. You should open long when the time candle closes above SMA20 and the Momentum line crosses the middle-level bottom-up and is above the average level:

sma momentum trading strategy

You should open short when the time candle closes below SMA20 and the Momentum line crosses the middle-level top-down and is below the average level:

short trade 20 pips a day

Once you have opened a, set the Take Profit and the Stop Loss orders 20 points away from it. Since more than 70% of the trading strategy signals result in profit, your total earnings record will always be higher than the losses record.

If you want to increase your trading efficiency, you can set the Trailing Stop order in increments of 1 point. Trail the open after the price has passed over 70% of the distance to the Take Profit order. That is, about 17 points.

You can also do the following. Open two and set initially two Stop order as described above. Set the Take Profit order of the first at 20 points and the Take Profit order for the second one at 40 points.

When the first Take Profit order activates, pull the Stop Loss order of the second in the black and wait until the trading position closes.

If the price has reversed, the will close in the black and you will get a profit from one. If the price keeps moving, you will get a total profit of 60 points.

Of course, this s may close by the Stop Loss order as well but it happens 3 times less often. Therefore, this approach will have a meaning!

Important: if the price closes above/below the SMA20 moving, and after you open the currency quotes reverse and cross (it is only about the closing price) SMA20 other way round, you should close the trading position manually. In such cases, quotes usually knock down the Stop level and it is pointless to wait for the outcome of the situation.

What’s unique about this strategy is that it can be applied to any currency tool and timeframe. The time of the highest day volatility is chosen for trading, which provides this trading tactic with a high-Profit factor and a few profitable trades.

MONEY MANAGEMENT

From money management, the “20-points-a-day” technique is very simple to implement. There are the simple requirements that you should follow under any circumstances:

  1. If you use this strategy, the size of a must not exceed 2% of the trading account size.
  2. If you open two trading positions on one currency pair, the size of each must not exceed 1%.
  3. As the trading account grows, you should increase the size of the trading positions but not exceeding the 2% limit as indicated above.
  4. If the strategy has gone into the drawdown, you can reduce the size of the trading lot proportionally to make sure the flexibility of the trading capital management and not overload your trading account. However, this rule is optional and at your discretion.
  5. If you have made two money-losing trades in a row, you should better stop trading on that day. Most likely, the market is flat and it will keep that way until the next trading day. In that case, it makes no sense to keep trading. Save your trading account for the next day.
  6. To make this Forex trading strategy more profitable, use the automatic Trading Stop order of the MT4 platform in increments of 1 point.

CONCLUSION

As you can see, even a simple trading strategy like this is good enough to make money on the Forex market. Its profitability is provided with a high percentage of the successful trades, ease of the trade and support as well as efficiency on any trading asset and timeframe.

11 COMMENTS

  1. Thank you for this blog, it has opened my mind to a better and effective perspective of trying to protect my cash

  2. Awesome post! Just lastnight i was thinking about how patience plays in trading and you made sense of it all to me with this post.

  3. Thanks man,every information you share here is very valuable to me,I just wish I knew this earlier would have saved me few bucks

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