100 Green Pip Strategy (Conservative Approach)

Key Principles:

• Risk Management:
  • Never risk more than 1-2% of your account balance on a single trade.
  • Use a stop-loss of 20 pips or less.
  • Aim for a risk-reward ratio of at least 1:2 (e.g., 20 pips stop-loss, 40 pips take-profit).
• Trade Only High-Probability Setups:
  • Focus on strong trends or key support/resistance levels.
  • Use multiple timeframes for confirmation (e.g., H1 for entry, H4/D1 for trend direction).
• Discipline and Patience:
  • Avoid overtrading. Wait for the best setups.
  • Stick to your rules, even after a losing trade.
• Use Technical Indicators:
  • Combine indicators like Moving Averages, RSI, and MACD to confirm entries and exits.

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Step-by-Step Strategy

1. Choose the Right Currency Pairs

• Trade major currency pairs like EUR/USD, GBP/USD, or USD/JPY. These pairs have high liquidity and tighter spreads.
• Avoid exotic pairs or pairs with high volatility unless you have experience.

2. Identify the Trend

• Use the 200-period Moving Average (MA) on the H4 or D1 chart to determine the trend:
  • If the price is above the 200 MA, look for buy opportunities.
  • If the price is below the 200 MA, look for sell opportunities.

3. Wait for Pullbacks

• In an uptrend, wait for the price to pull back to a key support level or the 50-period MA.
• In a downtrend, wait for the price to pull back to a key resistance level or the 50-period MA.

4. Confirm with RSI or MACD

• Use the Relative Strength Index (RSI) to confirm overbought/oversold conditions:
  • In an uptrend, look for RSI to dip below 50 and then rise above it (buy signal).
  • In a downtrend, look for RSI to rise above 50 and then fall below it (sell signal).
• Alternatively, use the MACD to confirm momentum:
  • Look for MACD crossovers in the direction of the trend.

5. Enter the Trade

• Place your entry order at the pullback level (e.g., 50 MA or support/resistance).
• Set a stop-loss 20 pips below/above your entry point.
• Set a take-profit of 40-50 pips (risk-reward ratio of 1:2 or better).

6. Manage the Trade

• If the trade moves in your favor by 20 pips, move your stop-loss to breakeven.
• Trail your stop-loss as the price moves further in your favor to lock in profits.

7. Exit the Trade

• Exit the trade when:
  • The take-profit target is hit.
  • The price reverses and hits your stop-loss.
  • The trend shows signs of reversal (e.g., RSI divergence, MACD crossover).

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Example Trade Setup

Buy Trade Example:

1. Trend: EUR/USD is above the 200 MA on the H4 chart (uptrend).
2. Pullback: Price pulls back to the 50 MA or a key support level.
3. Confirmation: RSI dips below 50 and then rises above it.
4. Entry: Buy at the pullback level.
5. Stop-Loss: 20 pips below the entry.
6. Take-Profit: 40-50 pips above the entry.

Sell Trade Example:

1. Trend: GBP/USD is below the 200 MA on the H4 chart (downtrend).
2. Pullback: Price pulls back to the 50 MA or a key resistance level.
3. Confirmation: RSI rises above 50 and then falls below it.
4. Entry: Sell at the pullback level.
5. Stop-Loss: 20 pips above the entry.
6. Take-Profit: 40-50 pips below the entry.

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Risk Management Rules

1. Daily Loss Limit:
   • If you lose 2-3 trades in a row, stop trading for the day.
2. Weekly Goal:
   • Aim for 20-30 pips per day. If you hit your goal, stop trading for the day.
3. Position Sizing:
   • Use a position size calculator to ensure you’re only risking 1-2% of your account per trade.

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Tools and Indicators

1. Moving Averages:
   • 200 MA (trend filter).
   • 50 MA (pullback level).
2. RSI (Relative Strength Index):
   • Use default settings (14 periods).
3. MACD (Moving Average Convergence Divergence):
   • Use default settings (12, 26, 9).
4. Support and Resistance Levels:
   • Draw horizontal lines at key price levels.

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Why This Strategy Works

• It focuses on high-probability setups in the direction of the trend.
• It uses strict risk management to limit losses.
• It aims for consistent small gains rather than large, risky trades.

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Important Notes

1. No Strategy is Perfect:
   • Even the best strategies will have losing trades. The key is to manage risk and stay disciplined.
2. Backtest and Demo Trade:
   • Test this strategy on a demo account for at least 1-2 months before using it on a live account.
3. Emotional Control:
   • Stick to your rules and avoid revenge trading after a loss.

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By following this strategy, you can aim to achieve 100 green pips over time while keeping losses small. Remember, trading is a marathon, not a sprint. Consistency and discipline are the keys to long-term success. Let me know if you need further clarification or additional tools!