Hey guys, I’m Aurora and I'm part of the Forex Strategies Resources team.
In this video I will show you the Winning Pips System.
Winning pips system is a trend momentum strategy that you can apply to any time frame, 5 min, 30mins, 1hr, daily and weekly. Depending on the time you
have at your disposal to monitor the market. The best time frame to apply this strategy is on higher time frames. From H1 and above.
You can trade this system on any pair. The best pair that has yielded good results are: EUR/USD, GBP/USD, GBP/JPY, AUD/USD, NZD/USD and  AUD/JPY.
This powerful trading system can be applied on any forex trading platform.
The principle behind trading successfully is to first determine:
the direction of the trend. If you can determine the direction of the trend accurately, then more often than not, you would always be successful when trading the
forex market. Remember the slogan: “the trend is your friend”. When you trade in the direction of the trend,
your trades would always go well because the market would comply with you.
Another very important principle to learn is to determine the turning point of the market. This is very crucial.
Another thing to keep in mind is the momentum of the market:
what moves prices in the forex market is momentum. Knowing when there is a momentum is the key to successful trading. Weak momentum signifies low
volume of trades which translates into sideways movement. Trading when the market is moving sideways could be dangerous at times. With a proper
understanding of momentum and how to apply it to your trading system, you will be riding the market and smiling as you follow the direction of the market.
In the following image I show you the setup of the strategy.
Trading Rules that must be met for a buy trade:
The Parabolic SAR dot, must be below the current signal candle.
Awesome must turns GREEN.
Accelerator must turns GREEN.
Price must be above the 200 EMA.
If all 3 conditions are met and the price is above the 200 EMA, enter a LONG trade at the close of the current candle.
The best signal is when all indicators line up on the same candle, just turned from RED to GREEN, Parabolic SAR just changed position.
STOP LOSS:
Set Stop Loss at the LOW of the entry candle.
PROFIT TARGET:
Set Take Profit to the same amount of pips as Stop Loss. For Example, if the difference between profit and entry is 50 pips, set your profit target to be 50 pips or
better still, you can go for 2:1 risk reward. If your stop loss is 50 pips, you can aim for 100 pips to take profit.
Alternatively, you can ride the trend until both the Awesome and Accelerator change color (to RED).
NB: If the price is below the 200 EMA, and you get a buy signal (all conditions met for a long trade as explained above),
ignore that trade. We want to be trading only in the direction of the trend.
Trading Rules That Must Be Met for A Sell Trade
The Parabolic SAR dot, must ABOVE the current signal candle.
Awesome must turns RED.
Accelerator must turns RED.
If all 3 conditions are met and price is below the 200 EMA, enter a SHORT trade at the close of the current candle.
The best signal is when all indicators line up on the same candle. (Awesome just turned from GREEN to RED, Parabolic SAR just changed position.
STOP LOSS:
Set Stop Loss at the HIGH of the entry candle.
Profit Target:
Set Take Profit to the same amount of pips as Stop Loss.
Alternatively, you can ride the trend until both the Awesome and Accelerator change color (to GREEN). Set Take Profit to the same amount of pips as Stop Loss.
For Example, if the difference between profit and entry is 50 pips, set your profit target to be 50 pips or better still, you can go for 2:1 risk reward.
If your stop loss is 50 pips, you can aim for 100 pips to take profit. Alternatively, you can ride the trend until both the Awesome and Accelerator change color (to RED).
NB: If the price is above the 200 EMA, and you get a sell signal (all conditions met for a short trade as explained above),
ignore that trade. We want to be trading only in the direction of the trend.
Now I explain practically how to filter this system with the volatility already expressed in this video.
The system can be filtered with the volatility method discussed in this video. In the chart I have drawn rectangles from high to low and vice versa, so I can
visually observe the price fluctuations. When volatility compresses don't enter. In the case of the chart there
is an uptrend when you have a retracement if it is not at least 50% Fibonacci do not enter.
The second picture I show a single example of what the retracement should look like, in this case is greater than 61%.
In the next image there is a retracement of around 61% Fibonacci which generates a subsequent good entry and retracements which are best avoided although they
could generate a good entry but the odds are that they generally generate an unprofitable trade.
In conclusion in this video we have learned a classic trend-momentum system and how to filter it with volatility to have better and constant results.
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