Pipsing Strategy – Rules of Opening OrdersTuesday, 23 January 2018 09:22
Pipsing or Scalping Strategy involves trading on short timeframes. Also, a large number of transactions is made in this strategy.
The efficiency of this method exceeds 65%. Profit on orders usually is not impressive, but if you trade regularly, at the end of the month you get a good profit.
What is Pipsing
Scalpers profit off of small price fluctuations – pips, but even a minimum moving already allows to get a profit. Below we will consider trading methods with various leverage.
For instance, having a $100 deposit and a leverage of 1:30, you can make deals with 0.03 lots. It allows earning $0.3 from each movement in one pip. Usually, the followers of this strategy earn 50 pips per day, that is about $15.
At the same time, following the Pipsing system, when borrowing a leverage of 1:200 – 1:500, you can trade 0.2 lots. These positions will yield $2 from each moving. This is an example of a quiet scalping, which can help you to earn up to 20 times more than in the previous method.
Features of Pipsing Strategy
The main purpose of a trader is making many transactions, which yield a small profit to get an overall good profit per month. It is better to choose currency pairs with a small spread. Otherwise, the broker’s commission will “eat” all the profit.
Give your preference to the most popular pairs in the Forex market - EUR/USD, USD/JPY, GBP/USD, which are highly volatile. This strategy is perfect for them. You can trade currency pairs with a floating spread, but check the indications when opening a new deal.
Scalping on News
Often traders like playing on the news, which comes from the Euro area. In this case, trading does not depend on timeframes, traded assets depend on the involved country. It is the most popular method of the Pipsing Strategy’s implementation, and below we will discuss it.
Everything you need is an economic calendar from any broker’s website and a user news indicator.
- In the calendar, the announcements, forecasts and previous indications on the mentioned assets are published. Therefore, you can filter the important updates and news of medium importance.
- On the chart an indicator displays a list of news, indicating the time of their release. The robot allows to not miss the important event and be guided in time for opening a profitable order.
The main purpose of a trader, who works on Pipsing Strategy, is cross-checking the news information with the previous data and forecasts. If a new message is more optimistic than forecasts and statistics, then trade in an upward trend. Otherwise, trade in a downward trend.
It is very important to act rapidly after the release of the announcement because you can get a good profit for a few minutes. Also, you should understand that the powerful news give a strong impetus. Thus, we recommend choosing the events with two-three bulls.
When looking for messages, be guided by the fact that currency pair is not indicated directly. A national currency is under the influence, and, as a result, the quote of the pair, which includes this currency, changes.
Example: if you found the news, which indicates the euro’s rise, then the EUR/USD pair will go up, and vice versa.
Summary on Pipsing Strategy
The Forex market will necessarily react to the announcement of the important news, and the task of the pips-maker is to open the deal with the biggest activity of the pair. Owing to a big spike some traders allows slippage and hold deals for a few minutes.
To avoid this situation, for Pipsing Strategy choose a broker with ECN accounts, as well as direct access to the interbank market.