With the rapid growth of online currency trading many strategies become more popular than others. One of such strategies is 10 pips a day trading strategy. It is widely advertised as one of the fastest ways to make profit on Forex.
Just as any other trading method 10 pips daily strategy can be effective for different kinds of traders. Let’s take some time and break down the key points of this strategy in order to better understand it and implement it correctly.
What is the 10 Pips a Day Forex Strategy?
First of all, pip is short for point in percentage. For the USD related pairs one pip can be represented as $0.0001 and referred to as one basis point. The goal of the 10 pips strategy is fast and small wins on a daily basis.
That means that when you achieve the 10 pip target you stop trading. And the next day you repeat the process until, again, you make a 10 pip gain. As you may imagine this particular strategy can have some beneficial aspects as well as some downsides.
The major advantages of this method are simplicity to the point where even beginners can easily follow it, and achievability as the 10 pips can be made faster than, say, a 100.
Some of the disadvantages are that this method cannot be used for the specific currency pairs, especially the ones with large spreads, and that this method restricts the trader from making a higher profit.
The Idea Behind the 10 Pips a Day Forex Strategy
The main idea of the 10 pip strategy is to minimize your loss by reducing the amount of trades. But in order to benefit you make sure to learn how to make 10 pips a day in Forex the correct way. A few handy tips for this are:
Set a limit of losing trades you can have before stopping to trade. That applies even if you didn’t achieve the 10 pips target. Better walk away and come back tomorrow
Sell when 5 cross 12 downsides and RSI cross below 50
Buy when 5 ema cross 12 ema to the upside and RSI cross above 50
Use the stop loss function to prevent the unwanted outcome
If you decide to implement this strategy consider all the variables and do the research. It is always a good idea to ask your broker for their opinion on the matter, because what works for some traders might not necessary work for you or vice versa.
