Pipsing involves daily work in front of your computer, minimum of news and maximum of luck. There is no need to know the financial mechanism of global economy regulation and countries’ GDP. Even the bullish market has a lot of pullbacks during the day, at which you can open and close positions at the supposed extreme points. The main rule of a trader is not to go against the trend.
The pipsing strategy for the EUR/JPY pair allows placing the stop loss far from the opening price, thus taking into account the risks and possible losses. Such a relaxed approach to this pair is caused by its relatively low volatility on Forex. Intraday changes do not exceed 200 pips, rarely 300 pips, with no more than 10 such situations a year. Thus, intraday changes of 400 pips took place only once in January 2008 and twice in February and August 2007.
This allows you to open short positions without much risk. However, it is necessary to look at the hourly chart so as not to miss the trend reversal or any serious economic situations. For example, if there is a natural disaster in Japan, you need to buy the euro against the yen.
The ideal profit for pipsing on the EUR/JPY pair is 5-7 pips, with the stop order set at 15-20 pips. Since the beginning of 2008, the euro has strengthened for 600 pips, but now bears got their way and the EUR/JPY rate is returning to the start. In August, the euro fell to 160 against 162 at the beginning of the year.
Those who prefer the pipsing strategy are recommended to follow bearish trading. In spite of all the changes during the day, you should not buy at the moment when the market indicates selling opportunities. It is better to wait for pullbacks. Negative data on the unemployment rate in the eurozone and other news, as well as positive data from Japan, means that the euro will most likely fall. Both the general market sentiment and traders’ forecasts confirm that trend.
The relative stability of the pair should not confuse you, since the changes of 100 pips in this trading method will result in the loss of your deposit. The result of pipsing is determined at the end of the day and consists of the spread, losses, and the profit. A successful day is when profit is exceeding losses. That is why you should set support levels, follow the patterns, and do not hesitate to close a deal if there is a breakthrough. Despite the fact that intraday trading involves setting stop orders, a lot of the traders who catch profit pips ignore this rule saying that nothing will happen if they are constantly monitoring the trade.
Some brokers do not encourage pipsing and execute such orders with long delays or simply ignore them. Well, this is inevitable for someone who makes about 200 transactions per day. If your broker is honest, then you will not feel deprived or ignored. Otherwise, the EUR/JPY pair is a good trading instrument for day traders.
