175# 10 pips Forex Trading System
Submit by Joker (Writen by Free Trade Ideas) 16/01/2012
The Hedge10 is designed to capture 10 pips from any currency pair. I basically trade
the GBPUSD and the EURUSD with it.
Logic and Idea behind Hedge10
If you trade Forex, you will be familiar with the various important price levels. They
include Weekly highs and lows; Monthly highs and lows; Pivots Points Daily highs
and lows etc...
What happens when price meets these levels? Well, you can be sure there will be
much activities going on... Because Traders from all over the world are watching
these levels. There will be lots of price action around these important levels. They will
either Break through or bounced off... right? Take a look at recent Monthly and
Weekly High Lows levels
So how are these levels being traded? Traders will place set & forget pending limit or
stop orders while the more experienced traders will confirm these breakouts or
bounce offs by usng their own methods like Price actions or indicators.
If you look at the chart below, it describes a typical Fake breakout of the Daily High.
If you had traded this Breakout, you may have just lost some money but if you had
placed a Sell limit order at the High, you will be laughing all the way to the bank with
In the picture 10 pips forex trading system in action.
The logic behind Hedge10 is to place a Sell Limit order and a Buy Stop order at the
High and a Buy Limit Order and Sell Stop Order at the Low (with a fixed Stop Loss
and Take Profit) at these important levels.
So that when your Buy Stop Order is hit, your Sell for Limit order gets hit too and so
you are hedged. Place a Take Profit of 10 pips more than the Stop Loss.
With the positions hedged at these important levels, it doesn't matter which side of
the market is going. As long as one side hits your Take profit, you get 10 pips... Are
you seeing the picture here? Are you even excited about it yet?
I personally trade Hedge10 using the previous Day high and Low levels because I
want action everday, unless that trading day happens to be in a tight range (Inside
Now lets see Hedge10 in action with the Daily High Low. We will use the above chart
Previous Day's High: 1.38925
Previous Day's Low: 1.37228
Buy Stop order was place at 1.38925. At the same time, place a Sell limit at 1.38925.
(Assuming no spread for easy calculations. You can add in spread to the Profit target
so you can nett 10 pips). Both orders' Stop Loss and Take profit were set at 30 & 40
Do so for the Previous day's low as well with a Sell Stop and Buy Limit Order.
After you set the above orders, you may turn off the computer and check back at the
end of the day. 90% of the time, you win...This was what happened...
The above scenario gave us 150 pips from our Sell Limit but thats not what Hedge10
Hedge10 gives you a 90% win rate getting 10 pips a day for just a single currency pair.
You may use more pairs for more profits.
Now before you start thinking about your million dollars, there are some risks using
There will be times when you will experience a whip-saw, meaning you get stopped
out at both levels for a -60 pips but very rarely...really. Manually back testing the last
6 months Hedge10 was whip-sawed 4 times but as you can see, the rewards
surpassed the risks.
Another risk is Brokers' risk. Once your Broker discovers what you are doing
especially if you are making 30 pips (assuming you trade 3 pairs) everday for the past
100 days, they may try to be funny. One way to get around this is simple. Just open 2
Forex accounts with 2 different Brokers but withe the same spread. One account is to
place all the Limit Orders and the other for Stop Orders.
Well, that’s all there is to Hedge10. I am confident that you will like this Method and
profit from it. Stay persistent, review the rules and do manual back-testing to gain
Share your opinion, can help everyone to understand the forex strategy.
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