How to manage stop loss if we are looking for profit of only couple of pips. Apparently big stop loss is counterproductive and tight stop loss ensures huge percentage of losing trades.
One of the solutions, is to ask only for what you are willing to give. Stop loss equal to take profit (as in Zero – the best forex scalping strategy).
It is also possible, to discard stop loss completely. But then what to do with small percentage of positions that will never move in profit ? Is such a a strategy doomed from beggining ?
We are here to show you a profitable forex strategy with averaging as a solution.
Forex strategy indicators: Zig zag (4,5,3)
Timeframe: 1 hour
Currency pair: Any, we choose forex pair according to historical price range.
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The scalping averager Forex strategy rules:
We establish historical price range, by switching to monthly timeframe. We establish maximum and minimum value that price has reached since inception. We divide it into 3 thirds. Upper third is sell only. Central zone – is no trade zone. Bottom third is buy only zone.
Sell only zone of historical price range.
Sell.We enter once previous price high (marked by zig zag) is reached again.
Buy only zone of historical price range.
Buy:we enter once previous price low (marked by zig zag) is reached again.
No position can be opened at worse price than any of currently opened positions !
Take profit: 6 Pips
There is a power in simplicity and not taking no for an answer. This strategy has its risk, but they are manageable and outweighed by rewards in a long run.
Loss: 100 pips.
Only after position reaches loss of 100 pips, we disregard Take profit of 6 pips. We will be looking to close this position together with other losing trades by averaging.
Averaging take profit:Average price of all positions + 50 - 100 pips of profit.
Strategy requires about 3 000 – 6000 USD of free balance to trade 1 microlot and 1 currency pair.