Trading the
long-term trends or scalping for small pips at a time are both profitable
strategies that many traders use in the Forex. However, an equally if not more
profitable strategy involves aiming for 120 pips on a regular basis with high
probability setups. These are setups that usually lead to the major breakouts that
we see each week for all currencies and which are easily visible on the 30
Minute Charts. When these are combined with Stop Losses of just 40 pips on each
trade, you end up with a wide 3:1 Reward Ratio that provides a large cushion
for your losses as your profits roll in quickly.
BREAKOUT SETUPS
The key to this
strategy is that you identify setups that indicate that the market is set for a
sharp or large breakout in the direction of the weekly trend. In most cases, the 30 Minute Chart will provide
Pennants and Ranges which when broken, will lead to the breakouts that you see
taking place on the Daily Charts each week. These setups start as well as continue each weekly trend until the weekly range of 300- 400 Pips is hit for the most liquid, popular
currency pairs. However, this strategy only requires you to take 120 Pips on each trade within the trend on o…