Pip Trap Strategy

[lbranjord]

THE PIP TRAP

I'd like to share one of the strategies I use to make the pips pop. This is a great plan for new traders and a good test to see if you can make a trade and follow the rules. If you can...you'll get pips. Sorry for you Metatraders out there, I have not tested this on the four hour charts yet. It would need some tweaking. Also, it is only tested on AUD/USD, USD/JPY, and GBP/USD.

CHART
3hr
60sma

TIME
7am CST

PAIRS
1. AUD / USD Best
2. USD / JPY Great
3. GBP / USD (some tweaking may be necessary) Good

INSTRUCTIONS:
Wait for the first two three hour bars to form - 1:00 and 4:00 (i believe). Put a horizontal trendline over the high and a horizontal trendline over the low. This is what I refer to as the RANGE.

If the candles are above the 60sma, place a limit order to buy just over the top horizontal line.

if the candles are below the 60sma, place a limit order to sell short just under the bottom horizontal line.

Calculate the distance between your two horizontal lines. This is the range. My example picture shows a 93 pip range. Do not set any orders if the range is 100 pips or greater. (just doesn't work out)

Divide the range by 2. 97/2 = roughly 47 pips. Set the stop and profit on your limit order to 47 pips.

At this point you can get dressed and go to work, or go back to bed, whatever. If you do happen to log in and see that you have made 15 pips or more, set your stop loss to break even. Don't try adjusting target and stops otherwise. (Note - system is profitable without any adjustment to loss, that is only a slight optimization).

This is the Pip Trap, it works for me. I hope it makes you some money.

If anyone tries it, let me know how it worked for you!

 

[lbranjord]

I used 'worst case scenario' backtesting, so that, any close calls I logged as losses. I tested all of January and February for pairs USD/JPY, EUR/JPY, AUD/USD. 688 Pips with this strategy, assuming I made every possible mistake and had poor entries. Trading this system real time has been a pleasant surprise. I have not had a losing day and average 10-20 pips. There will be losing days, and periods of drawdown, so I trade 1 minilot per pair on a $5,000 account.

I know there are systems and traders out there that can rake in 100+ pips a day, but if your goal is consistency and freedom, trade this KISS system.

You don't have to look at the charts for more than 10 minutes and you will be profitable most days.

 

[Mr Flibble]

Hi use this free software to test:
www.forexsb.com you can download historical data with a demo Metatrader account. However there is no way to change the stop levels according to your range so its not perfect. Need to get my head around the timezones but it looks a nice system. Drawdown is the key so keep testing!

 

[lbranjord]

Hey thanks Mr Flib. Yeah this system is a proto to the one I am referring to. I'll check it out now

 

[lbranjord]

Pretty messed up, but this strategy does not work on Metatrader. With their charting, backtesting fails every time. With Oanda charts, live and backtest, this strategy slays.

I don't know, maybe oanda has smoother candles and quotes? Anyone have experience with this issue?

 

[lbranjord]

To anyone who sees this thread, know that if you use this strategy, you'll break even or lose because of the spreads. I overlooked some key things here and although I made money, in the long run, I would lose or break even.

Don't trade it. PM me and I'll give you a more profitable version of this Set and Forget strategy.