(1) Do a 10-point trading strategy every day
"10 pips a day" - The basic idea behind this term is to stop trading as soon as you have made 10 pips for the day. Similarly, you can decide whether to follow the idea according to your own idea. You can stop trading after earning 10 pips, or you can ignore it and trade 20, 30 or even 100 pips per day depending on market conditions.
But only go ahead if you have 100% confidence in the market. If there's even a little bit of uncertainty, make sure to exit right after 10. A key aspect of this strategy is the selection of currency pairs, one must have sufficient expertise to understand the market situation and choose those currency pairs with a minimum profit potential of ten pips.
(2) Pairing Bollinger Bands with Stochastic Indicators
- Long-term rules
1. The market must be in a strong uptrend.
2. Wait for price action to move down the lower Bollinger Band.
3. Let the stochastic reverse in the oversold region.
4. Only when the above two rules are met, can it be held for a long time. Also, consider the momentum of the price.
5. Place the stop loss just below the lower Bollinger Band.
- working principle
The following example is the last week of February 2020. Five different types of transactions were carried out on five trading days, and the profits of 10, 20 and 30 points were successfully generated in the market. According to this strategy, a conservative trader must stop trading after earning 10 pips for that trading day. However, if you are an aggressive trader, you will choose to continue to strive for greater profit goals.
trading on monday
The chart below represents a buy trade for the EUR/CAD currency pair. We took a long position during the February 24 New York session when all the above rules were met. Our stop loss is placed below the Bollinger band.
Three different targets were selected based on market conditions and prevailing S&R levels. As mentioned earlier, if you are a conservative trader, get out of the trade as soon as you make 10 pips.
trading tuesday
The next day, we identified some potential market moves and chose the EURAUD currency pair. We watched for a long time on February 25th and could clearly see indicators showing a clear buy signal.
On this trade, we hit our third target and exited the trade after making 30 pips.
trading on wednesday
The third trade was in the EUR/CAD currency pair during the Asian session on February 26, 2020. We are long on the pair when the price hits the lower Bollinger Band and Stochastic indicates oversold market conditions.
We could have exited the trade at 10 pips, but the market started a bullish streak which made us wait for the price to hit our third target.
trading on thursday
On the fourth trading day, we entered a long position on the AUD/NZD currency pair. On entry, the price hits the lower Bollinger Band with a stop just below the recent low.
We didn't get out of the trade until we hit our third target of 30 pips because of higher pips.
friday deal
For Friday's trade, we have chosen the AUD/NZD currency pair. On February 28, 2020, we had a long walk during the Asian trading session. When both indicators line up in one direction, it is a clear sign that the sellers have given up and it is time for the buyers to lead the market. Even with the market moving north, we've already exited our third target.
- short position rule
1. The market must be in a strong downtrend.
2. Wait for price action to slow down in the upper Bollinger Band.
3. Let the stochastic reverse in the overbought region.
4. Only when the above two rules are met can you go short. Also, consider the momentum of the price.
5. Place the stop loss above the upper Bollinger Band.
trading on monday
The chart below shows our first sell trade in the NZD/JPY trade on February 24, 2020. We went short when price action touched the upper Bollinger Band, while Stochastic indicated an overbought condition.
The stop loss is placed above the upper Bollinger Band. We have reached our third target and the market has made a new lower low.
trading tuesday
The chart below represents the USD/CHF currency pair. The pair was in an overall downtrend and on February 25, 2020, a sell trade was activated after we reached the sell criteria.
We can see the market hit all our targets in just a few hours.
trading on wednesday
On the third day, we selected the USD/CHF currency pair to identify a sell opportunity on February 26, 2020. The entry point is when the price trend hits the upper limit of the Bollinger Band, and the stop loss is just above the upper limit.
The reason we put our stop here is because the bands of the indicator act as dynamic support and resistance levels for the price action.
trading on thursday
The fourth trade belongs to the CAD/JPY currency pair, and we entered the short position on February 27, 2020. When both indicators lined up in one direction, we sold and took profit on the third target.
friday dealFor the last sell trade, we selected the CAD/JPY currency pair. A sell trade was activated during the Asian session on Friday, February 28. When Stochastic reached the overbought region and reversed sharply, we saw price action touch above the Bollinger Bands. This essentially means that the market is ready to fall.
- bottom lineIn almost all cases we pursue only the third objective and make a profit of 30 pips. The reasoning behind it is to show you the reliability of Bollinger Bands and Stochastic combinations. One last reminder, if you are a conservative novice trader, please stop trading after earning 10 pips per day. However, if you have enough experience to predict the market, you can make more profits according to the market changes.
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