What is the Theory Behind the 50-Pip Forex Strategy?

 

Are you interested in learning the best and simplest Forex trading strategy? To make an average of 50 pips each day on a trend movement, the 50 pips a day Forex strategy is a good choice. Find out what the Forex 50 pips day method is, how it works, and the advantages and downsides as you read this post. 

 

 

Can you explain the Forex method that promises 50 pips a day? 

 

The 50 pips a day Forex method was developed as a day trading technique that exploits the intraday volatility of currency pairs by taking advantage of price swings that occur every hour. Nonetheless, this tactic is only applicable to a small subset of currency pairs. Large pairs like the GBP/USD and EUR/USD work well with this method. 

 

 What are the Pros? 
 

• There are no indicators of success with this method. 

As a result, you won't need to spend hours every day poring over charts and indicators in search of profitable forex trading opportunities. 

 

• Not having to keep an eye on the screen always is a major plus. 

To know when to initiate and close your trades, you don't have to keep tabs on them all the time while using this method. In the morning, just a few clicks are all that's required. 

 

 

What are the Cons? 

 

• The daily trading limit is one position per asset. 

This approach may not be for you if you're the kind of Forex trader who likes to open several deals on a single asset every day. 

 

• There is a cap on the number of assets it can manage. 

Large currency pairs, such as the Euro-to-Pound and the Pound-to-U.S.-Dollar, are most suited to this 

 

• Maximum daily trade profit is 50 pips. 

Although this is a straightforward approach, it does not provide the greatest potential for financial gain. There are other, more involved ways that can help you make even more money. 

 

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Basic guidelines for the 50-pip Forex trading system 

 

The 50-pip-a-day Forex technique is among the simplest methods for making money in the foreign exchange market. Then, just follow these few easy steps to put it into action: 

 

1. One-hour candlesticks should be positioned at 7 a.m. GMT. This time zone is ideal for this tactic because it allows you to take advantage of the daily shift. 

2. In preparation for the close of the 7:00 a.m. GMT 1-hour candlestick, you should enter two contrasting pending orders. A buy-stop order set two pips above the high and a sell-stop order set two pips below the low make up the first pending order.

3. One of the orders will be executed as the currency pair's price moves toward it. As soon as one of the orders is carried out, the other must be cancelled. 

4.Stop-loss orders for buy orders should be set 5-10 pips below the low of the 7 AM GMT candlestick, while stop-loss orders for sell orders should be set 5-10 pips above the peak of the same candlestick. 

A take-profit order of 50 pips should be placed. 

Each time the asset's price reaches the stop loss or takes a profit order, the position will be automatically closed. Nonetheless, there are times when the price doesn't meet any of these orders by the end of the day, and you'll have to decide whether to terminate the position or let it remain open for a little longer. 

 

 
The risk management included in the 50 pips Forex strategy 

 

The 50 pips a day Forex trading technique is easy to implement, and it almost always results in profits for traders who follow it; nevertheless, there is a possibility that it will result in losses for those traders. Therefore, investors should not put up capital that they cannot afford to lose when trading. Although some traders may be tempted to employ a big amount of leverage to boost their profits, these traders should be aware that leverage is a two-edged sword; it can magnify both the gains and the losses that are experienced in trading. 

 

You should take advantage of the possibility of placing a trailing stop-loss order if it is presented to you by your broker and if it is possible. The benefit of using a trailing stop loss is that anytime the asset price goes in your favour, the stop-loss moves as well. This allows you to both safeguard your profits and reduces your losses when the price of the asset moves in your favour. However, the cost does not change when it travels in a direction that is not favourable to you. 

 

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Is the method of aiming for 50 pips per day beneficial for anyone? 

 

The forex trading method known as "50 pips a day" is an excellent choice for investors who are interested in making a respectable profit with a low level of involvement in the market. You only need to open two opposing pending orders, choose a stop loss and take a profit order for the order that is completed, and then cancel the other order. Therefore, you ought to give that a shot if you think it could be an exciting experience for you. 

 

Intraday traders are the ones who employ this approach the most frequently. They are the ones who like to finish their transactions at the end of the day for the simple reason that doing so allows them to lock in the profits they have made throughout the trading day. Swing traders, on the other hand, may utilize it in situations in which the price of the asset does not reach the stop loss or take profit orders during the day. These investors keep their positions open for at least two days because they anticipate that the underlying asset will meet the take profit order on the next trading day. 

 

 

Which forex brokers are best for the 50-pip daily strategy? 

 

To get the most out of your 50 pips per day Forex strategy, you should only trade with a reputable Forex broker. This will ensure that your trading experience is smooth, and your money is safe. We have compiled a short checklist of things you should look for when selecting a Forex broker to help you narrow down your options. You can find them below: 

 

• Regulation 

If you want better trading conditions and more security for your money, you should work with a broker that is registered by a reliable regulator. 

 

• Discreetly low margins and fees 

Forex brokers, like any other business, need a way to turn a profit; they do it through commissions on trades, deposits, and withdrawals. If you must pay a bigger percentage of each trade as spreads or commissions, your earnings will suffer. 

 

• Commentary from existing users 

Before signing up for a trading account and making your initial deposit, it's a good idea to check some customer evaluations of the broker. If you see a broker with a ton of bad feedback, you should run away as fast as possible. 

 

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