“Can you make 50 pips a day?”
It’s a question many traders especially day traders have asked.
It's the dream of quickly and consistently profiting in the foreign exchange market but trading Forex can feel overwhelming for beginners. Between tracking economic announcements, keeping up with geopolitical events, and monitoring price moves on countless currency pairs, there's a lot to juggle.
But it doesn't have to be so complicated!
The 50 Pips a Day Forex strategy is a simple, straightforward approach to Forex trading that can help simplify the process, especially for those who start trading. With this trading strategy, you don't need to watch the markets all day or stay on top of every little bit of news like in the case of day trading.
The core of the 50 Pips a Day strategy is this: identify a currency pair with clear support and resistance levels that tend to move between those levels consistently and take trades based on bounces off those key levels.
That's the gist of it!
By focusing on just one currency pair at major support and resistance zones, you can tune out all the noise and avoid getting overwhelmed. Taking one currency pair and one level at a time creates a framework that is easy to follow for beginning traders.
Of course, as with any trading strategy, this approach takes some practice and discipline, but its simplicity can help build confidence for new traders before moving on to more advanced techniques. The 50 Pips a Day strategy is all about keeping Forex trading simple.
This introductory guide will walk through the key components of this Forex strategy, including how to identify trading opportunities, where to place the stop loss, and how to manage your trades. By the end, you'll have a solid foundation for implementing this straightforward trading strategy with your own Forex broker.
No complexity is required!
What is the 50 Pips a Day Forex Strategy?
The 50 Pips a day Forex strategy is a day trading technique that aims to profit off the normal daily movement of major currency pairs like EUR/USD and GBP/USD but it can be used with other currency pairs as well.
The goal is to capture 50 pips of profit each trading day.
These profits don't have to come from a single trade - the total can be accumulated over multiple trades throughout the day. 50 pips represent roughly half the daily average range for most currency pairs like EUR/USD, GBP/USD, USD/JPY, or USD/CAD.
The key is targeting 50 pips of total profit per day, which may involve closing successful trades at 20 pips, 35 pips, 15 pips, etc. until the daily goal is reached.
The exact number per trade isn't important.
Simply accumulate small wins that add up to 50 pips by the end of the trading day.
Since this trading strategy focuses on smaller gains, buying and selling currencies multiple times, Forex traders can fall into the pitfall of overtrading.
While over time, these small wins compound into something greater, swing trading with the 50 pips a day strategy is the name of the game. The straightforward 50 Pips a Day approach allows swing traders to build confidence without getting overwhelmed and only trade Forex one time each day.
Give it a try and you'll be catching those pips in no time!
How to Get 50 Pips per Day?
To start, pull up the 1-hour candlestick chart for a major currency pair like EUR/USD or GBP/USD and make sure the chart is set to GMT.
Note* Make sure your Forex charts match the GMT zone or at least they have the 5:00 PM EST daily closing time. If you’re in a different time zone, use a GMT converter to match the Forex time zone into your local time zone, just look up what 7:00 AM GMT is in your time zone.
The Forex trading strategy revolves around trading the first hour after the 7 AM GMT candlestick opens without the need to use technical indicators to make trading decisions. 7:00 AM GMT is when volatility peaks during the opening of the London trading session.
Now, let's break down how to trade the 50 pips a Day strategy step-by-step:
When the 7:00 AM GMT candlestick closes, immediately place a pending order to buy two pips above the high and a pending order to sell 2 pips below the low of that candlestick.
One of these pending orders will trigger as the currency pair fluctuates in price and a breakout will eventually occur in one direction or the other. Once one is activated, cancel the other pending order.
Place your stop loss one pip beyond the high or low of the entry candlestick. If it was a narrow candlestick, use a wider stop loss between one pip and 10 pips to give the trade room to move.
Your initial take profit target is 50 pips from your entry price.
Monitor the trade on your computer or your mobile app. Be patient and wait for either your profit target or stop loss price to be hit.
Does the 50 Pips a Day Strategy Work?
Yes, the 50 pips a day Forex trading strategy works.
You now have two outcomes:
First, the price moves in your favor and hits your 50 pip take profit target in which case close the trade for a profit and be sure to celebrate your successful trade!
Come back tomorrow and repeat the process.
Source: TradingView GBPUSD 1-hour Chart
Alternatively, the Forex trading day ends with your trade floating at a profit or loss. You can choose to close at the end of the day no matter what and move to the next trade or, move your stop loss to breakeven to lock in profits and place a new trade on the next day's 7:00 AM GMT candlestick.
Source: TradingView EURUSD 1-hour Chart
Either way, stick to the trading plan consistently because the key is repeating these trading Forex steps daily.
In comparison to other trading strategies, you can trade Forex without the need to sit and watch the charts all trading day. Just set your pending orders and profit target, and the market will work for you as it takes advantage of the natural daily volatility.
How many pips a day is good for Forex trading?
While 50 pips may seem like a small daily goal, hitting it consistently can rapidly grow a trading account. However, new traders who lack trading experience are often misled into thinking it's an easy target simply because they have unrealistic expectations.
Ask yourself “How many pips are you making with your current trading strategy.”
In reality, making a steady 50 pips a day requires an edge over the Forex market.
While the 50 pips a day strategy works, trade must also follow proper risk management strategies but you can’t start trading without first understanding pips in Forex trading.
When you first start out trading Forex, you'll likely hear a lot about pips. A pip simply refers to the smallest price increment in a currency pair which will give you an idea of how much profit is 50 pips.
Understanding Pips in Forex Trading
A “Pip” is an abbreviation for:
Percentage In Point,
or Price Interest Point.
Prices in the Forex market are quoted using pips - a unit that represents the smallest amount a currency exchange rate can change.
When you look at a Forex quote like EUR/USD 1.0850, the pip is the fourth decimal place - so one pip of movement in the currency exchange rates would change the price from 1.0850 to 1.0851. At the same time, new traders need to be aware that there are fractional pips, often called pipettes, which represent the fifth decimal place in pairs like GBP/USD.
Some exotic pairs can be quoted (bid price and ask price) with only two or three decimal places and even major currency pairs like USD/JPY are quoted to two decimal places, so the second decimal place represents the pip.
If USDJPY moves from 145.20 to 145.21, it has moved up by 1 pip.
Currencies are always traded in pairs, with the first currency called the base currency (bid price) and the second called the quote currency (ask price) or counter currency. The pip value depends on the specific FX pair being traded.
It's crucial to understand how much one pip is worth for the pairs and position sizes you trade. This helps you precisely, measure price moves, calculate potential profit targets, and set proper stop-loss levels.
How much is 50 pips worth?
If a Forex trader has a long position for a standard 100,000 unit currency lots, each .0001 change in the exchange rate equals $10 profit or loss. So if you buy EUR/USD at 1.0920 and sell at 1.0970, you would make 50 pips or $500 profits.
The pip value depends on 3 factors:
The specific currency pair being traded,
How big is the position size,
And, the Forex account size.
A Forex trader has at his disposal 3 lot sizes
Standard lot (100,000 units) - Each pip movement is worth $10 of profit/loss
Mini lot (10,000 units) - Each pip movement is worth $1
Micro lot (1,000 units) - Each pip movement is worth $0.10
In the end, pips provide the precision needed to measure Forex price action, plan trades, calculate potential profit and loss for a trade, implement sound risk management trading strategies, and manage your trading capital.
Is 50 pips a day good?
Aiming for 50 pips a day using this day Forex strategy sounds attractive, but it's an ambitious goal – unrealistic expectations for most beginner traders. While experienced day traders may hit 50 pips regularly, market conditions are constantly shifting, making consistent gains challenging.
That said, making 50 pips in a day is possible and would represent a great trading day. If you enter a sell order on USD/CAD at 1.3580 and close at 1.3530, that's 50 pips gained.
Using leverage can multiply those profits too.
For example, with a $10,000 trading account and your Forex broker offering 30:1 leverage, 50 pips would equal around $1,500 in profit ($30 per pip x 50 pips). But that assumes a 100% win rate, which is impossible because, in reality, traders have winning and losing days even in perfect trading conditions.
The key takeaway is that 50 pips per day is an aggressive target, but hitting it even occasionally can grow your trading capital over time. Day trading is about compiling many small wins with discipline, risk management, and persistence.
Rather than focusing on a hard number, it's better to aim for consistency. Some days you may win 20 pips, other days 80 pips, be patient, don't overtrade, and don't rely on big home runs because even 20-30 pips per day can quickly compound into serious profits.
What is the EURUSD daily range in pips in forex?
The EUR/USD is one of the most traded currency pairs in Forex.
But how many pips does it tend to move each trading day?
To measure the EUR/USD daily range, we look at the pair's average true range (ATR). The ATR is a technical indicator that tracks the average pip movement between the daily high and low.
In 2023 so far, the typical daily ATR range for EUR/USD is around 75 pips coming off a high of 130 pips we saw in Nov 2022 (see figure below).
Source: Mataf – EURUSD Daily Pip Movement
Conclusion: Hitting the 50 pips a day target trading EURUSD would be very hard under current market conditions. That’s why you need to be aware of the average daily range of the currency you’re trading and adjust your profit target accordingly, or better pick a currency pair that has a bigger daily trading range.
Final Thoughts
Overall, the 50 pips a day Forex strategy is worth experimenting with, especially for those new to Forex trading. But manage risk appropriately and expect both winning and losing days because no strategy works perfectly in all market conditions.
Stay flexible, and focused on the long-term, and your consistency will pay off. By targeting small, consistent gains each day, account growth can compound over time.
If the 50 pips a day strategy has piqued your interest, the next step is finding a reliable Forex broker that matches your needs. Be sure to compare the best Forex brokers to find one with competitive spreads, platform features, and account options to support your trading style.
