I recently discovered quite a good strategy to use on the AUD / USD that i thought i should share, I call it the 25 Pip Plus Strategy. It uses the concept of the probability of Forex waves as the price moves up or down. This is breakdown on the strategy and how it can make you lots and lots of Pips with much less risk.. Please note, this strategy works for me however certain times are not best like extreme movements and after breaking news, negative or positive. So use at your own risk.
First off, if done right this strategy can grab around 40 to 50 pips per 5 to 10 minutes. It requires less risk as it uses opposite trades to protect the profit similar in a way to a stop loss, but instead opening a opposite position. This formula is not for those that love to win each trade, it is for those want guaranteed high profits which you will see in a second.
25 Pips or more is an Average Wave rise or Fall However it Depends on the Wave So Check
Open a buy or a sell in the direction on the trend, look for movements with at least 25 pips drops or rises, then buy in or sell at the bottom of one of these. If it does not go the way you want then consider it a normal trade, however if it does the normal 25 pip rise and then settles at a spot of resistance then watch the opposite currency, look for one indication to two that it will drop, this can be done with candle sticks, MACD, MA20 or any common indicator for more confidence.
Then on the second indicator in the opposite direction do the opposite position at the same risk, only use x25 or less by the way for this formula. So this is what it will look like.
What is needed
- $40 dollar Trade x25 making it a 10 cent per pip trade..
- Has to be a 2 pip or less Broker..
- A rise of at least 25 pips or more, if the rise is 35 pips before a drop then adjust to that, also check the drop amount in pips to know the average drop profit as well..
At 10 cents a pip your trade rises to higher than 25 pips to say 27 pips, then you notice two indicators of resistance at that level so you open a opposite trade rather than closing the the trade. This as you will see is similar to a stop loss other than the 2 pip spread. Oh i forgot to mention, this formula works with the 2 pip spread or less – Recommended for that is Etoro.
Okay so now that you have an opposite trade you close the first trade when it loses more than 5 pips and then keep the oppisite trade in play which would be 3 pips in profit over the pips spread. So to break it down briefly it looks like this –
- Buy or Sell to 25 to 30 pips profit.
- Open a opposite trade when it hits resistance
- When the opposite trade is at least in 5 pips profit close the first trade and make at least around 20 pips profit.
- Follow the second trade to resistance again and then follow the same formula bagging up to 15 to 20 pips each wave movement.
Why Less Risk?
Now you are probably wondering what to do if it breaks resistance and keeps going up and you already bought the opposite trade. Well do not worry this will be a long trade now which you can close later, the important thing is that you are at least 25 pips ahead minus the spreads and no risk, you are in profit even when it keeps going. See how that was less risk than simply closing the first trade at 26 pips or more. The less risk allows a trader to keep trading all day..
Worst Case Scenario
Later when you see a big indication that it will do a reverse and it starts to do it then that is good time to close your trade that is in profit and assess to keep the opposite trade going back to where it came from. A lot of the time it returns or nearly returns so that is where you can either take a small loss on that one trade or watch it and see if it returns and goes into profit. Either way you made profit from the previous trade as long as you set the stop loss in the gain ratio of the two trades you win overall.
And so even in worst case scenarios the formula allows gain either way. It is just mathematics.