All trading systems display the EURUSD price in 4 Decimal Places (1PIP minimum fluctuation) and most of the trading systems quote the price in 5 Decimal Places (0.1PIP minimum fluctuation)
I found that small time traders like me benefit by ignoring anything after 3rd decimal place and this is what I am going to demonstrate here
For every trade, I take the 1st profit @ 30PIPs and when market reverse and opposite trade manifest I EXIT TRADE and ENTER the NEW TRADE in the opposite Direction. So my money is always in the market
TRADE-1: Friday 5-OCT-18 SELL EURUSD @ 1.151xx and take 1st profit @ 1.14800
Imagine a strategy where you take 10PIPs as profit target. Now you SELL the market and achieved the profit target which means you are now waiting in the side line for another trade setup to emerge so that you can enter BUY or SELL.
By dividing your trade size in 2 parts, and take the 1st profit target at some fixed value and leave the remaining to ride with the market, you will always have some money in the market all the time, like a fixed deposit in a bank earning interest
This has one obvious problem. During your sleep if market turn around and start traveling in the opposite direction, how to protect yourself?
Setting the stop-loss as BREAK-EVEN or the 1st profit target level is one solution. What if the trade got prematurely exited due to retracement? Further more all the gains you made in the paper gets evaporated. To add insult to the injury market simply resumed the existing trend
So before you go to sleep, you need to CLOSE ALL THE OPEN POSITIONS and start fresh the next day. That is why it is day trading. So my money was always in the market (as long as I am watching it)
If the strategy calls for 10PIP profit target then we could engage only those swings that are equal are greater than 10PIPs (excluding the 2PIP brokerage).
In a given day if market swing by 50PIPs, it might include 10PIP swing 3 or 4 times, 5PIP swing by 8 or 10 times, 2PIPs by 20 or 30 times and so on. So for small time traders it is important to make the 1st decision: what should be the 1st profit target?
Ideally small time traders shouldn’t take the 1st profit target at all. They should only ENTER TRADE every time the signal manifest and close all the positions before going to sleep and repeat the same thing the next day
The reason I am taking my 1st profit target @ 30PIPs is to demonstrate, every time my signal manifest whether it guarantees a 30PIP RALLY. Now that I have made the 1st Trade of SELLING EURUSD @ 1.151xx, I want to see whether BUY Signal manifest before 1.14800 or lower than 1.14800
I am planning to demonstrate 10 Trades which might take 2 weeks. Let’s see how it goes!
EURUSD became BEAR @ 1.148xx Level. So I Enter a SELL. Now TRADE No.1 is set to BREAK-EVEN. Let’s see if that happen before I go to sleep (8 Hours from now)
With this week DATA, the strategy for Next Week Real Money Trades are as follows:
Trade Size: 2 x 0.01 (1PIP=10Cents)
Profit Targets: 15 and 30PIPs
Expected No. of Trades : 8
Expected capture of PIPs: 150 (15$)
