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20 Pips a Day: Forex Scalping Strategy
Forex scalping strategy “20 pips per day” enables a trader to gain 20 pips daily, i.e. at least 400 pips a week.
According to this strategy the given currency pair must move actively during the day and also be as volatile as possible. The GBP/USD and USD/CAD pairs are deemed to be the most suitable. Trading should begin no earlier than 12.30 GMT due to the volatile movements of the American session, provided that there are no scheduled economic data and news releases that day. In case there are, it is necessary to enter the market after the news release.
A trader is recommended to choose a 30-minute interval, set the standard Momentum 5 indicator in the trading platform and 20 SMA moving average.
A closed candle above the 20 SMA and the Momentum indicator above the average level indicate the market entry point for further purchase. When the price drops below the moving average and the Momentum indicator is lower than the average level, it is necessary to place a short trade on the pair. When a trade is open and the price is about to cross the 20 SMA line, the position should be closed.
Stop loss and take profit orders are placed on the level of 20 pips. As the interval is quite short, it is possible to use the trailing stop (from 1 pip). Another option includes placing the order at zero when the price is 10 pips away.
The developers of the strategy believe that the strategy "20 pips per day" will be profitable only if it complies with all the above-mentioned instructions.
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