If you want to become a successful trader, the only thing you should focus on is consistency. Of course, you cannot ignore losses in trading. Thus, if you know how to remain profitable after making some consecutive losses, a 50 pip per day can make you rich.
People who built their fortune by trading followed trade management strongly. A proper knowledge with a consistent profit can grow your trading account balance thousands to millions. Anyways, the truth behind the FX market is not favorable for traders. The uncertainty and risk often make trading hard, so building a simple system to earn 50 pips a day might be enough for you in your trading career.
The following section is for you if you want to build a fruitful trading portfolio using a simple trading system. Today, we will see both short-term and long-term trading strategies using 50 pips a day that might enrich your trading knowledge.
What is 50 pips a day forex strategy?
It’s hard to specify a profit target like 20 pips or 50 pips when discussing FX trading. Therefore, even if we talk about 50 pips a day, the earning might differ from the target. It depends on the market condition. However, the average market movement in major pairs is nearly about 50 pips that allow us to make a profit from trading major pairs.
As a result, any method where the profit target remains near 50 pips is called a 50 pips a day trading strategy. This method will talk about a simple trading system that is backtested and showed a decent long-term profit.
How do you execute a 50 pips a day forex strategy?
The best part of such a strategy is that it does not require sitting in front of the market all the time to catch the targeted pips. Therefore, if you open the trading chart from London to New York trading session, you can easily catch intraday market volatility and get out of the market with 50 pips.
This method is perfect for manual traders who want to identify a specific market condition to appear and open the trade immediately. However, some automated systems might offer you a guaranteed 50 pips a day, but it is not worth taking them.
What are the rules for a 50 pips a day forex strategy?
The average movement in the forex pair is around 50 pips a day for most of the major currency pairs. Therefore, even if the daily candle remained within a range, we can easily catch 50 pips from the intraday move.
However, this method requires some price action knowledge so that investors can eliminate unexpected market conditions.
- The first element is to identify the market trend and open the trade only towards the movement.
- Later on, traders should mark important near-term levels and supply-demand zones to help find a stable market direction.
- Finally, the trading session is another important tool — in the Asian session, the market remains choppy. Still, after a London breakout, the original movement happens, and investors can easily grab 50 pips.
Why is it worth using 50 pips a day forex strategy?
The biggest uncertainty in the FX market is that institutional traders like banks join the market, creating chaos and eliminating the existing momentum. Therefore, you might incur losses if your trading direction does not match the smart money.
Therefore, in the higher time frame, trading often becomes hard as it involves holding the profit for a long time. On the other hand, in intraday trading, you can get out of the market at any time if the situation goes against you. Therefore, it will incur a small loss but open room for another attempt to come back and regain the profit.
Therefore, trading in the intraday chart is often helpful for traders. In this 50 pips a day trading system, you can reduce the loss that makes it worthy in your trading portfolio.
A short-term strategy
Although the target profit is the same for both short-term and long-term trading, we will focus on the intraday chart in this method. First, open the chart in the 15-minute time frame and wait for a London break. After that, we will wait for a pullback and W pattern for a buy trade and an M pattern for a sell trade.
Bullish trade setup
- Wait for a bearish breakout after London opens until the price makes a new swing low.
- Open the trade after completing a W pattern.
- The trade is valid until the price shows a strong reversal.
Bearish trade setup
- Wait for a bullish breakout after London opens until the price makes a new swing high.
- Open the trade after completing an M pattern.
- The trade is valid until the price shows a strong reversal.
A long-term strategy
The long-term strategy involves catching 50 pips a day using the daily time frame. We will market weekly highs and lows in this method and open the trade from these levels once the specific formation appears.
Bullish trade setup
- Wait for a bearish daily closing.
- Set a buy order after the market opens.
- Set stop loss at 50 pips and take profit at 50 pips.
Bearish trade setup
- Wait for a bullish daily closing.
- Set a sell order after the market opens.
- Set stop loss at 50 pips and take profit at 50 pips.
Pros & cons
| Pros | Cons |
| •A straightforward method that even a new trader can follow. | •Intraday volatility may make trading invalid at any time. |
| •The short-term method uses a pure intraday market sentiment that is very effective. | •This method does not include a proper risk management system. |
| •This method works in both bullish and bearish markets. | •It is not possible to gain 50 pips every time. |
Final thoughts
After completing the whole section, you are now ready to implement this method in the price chart. However, the intraday volatility from news releases might make your trading hard. In that case, you can skip trading while essential news releases or open trades using a small lot size.
