Forex MACD Pip Pirate Trading System – High Profit Trading During the London and US Sessions

Forex MACD Pip Pirate Trading System or Forex Pip Pirate™ works on all timeframes. That’s right, it’s pretty much universal. Well, within reason, I mean don’t go off and start scalping the 1-minute right from the start (it’s damn tricky!).


Make it easier for yourself and stick to higher timeframes.

I’ll give you two tips for trading intraday:

  1. Stick to 15-min and above.
  2. Try and only trade during the London and US sessions – you’ll win more trades that way (although, the Asian session is good for AUD, NZD and JPY pairs!).

Let’s setup our charts!


The Forex Pip Pirate™ Rules


Now, my fellow Pip Pirates… You won’t believe how simple these rules are – honestly! They may seem even too simple, so I highly recommend that once you have finished reading this manual you go and check your charts.

That’s right I want you to go and see how effective this system really is!

There are just three rules for entry; and one rule for exit.


Entry Rules


Rule #1
  • We only BUY when the lower MACD (that’s the one with the 12,26,9 settings) is ABOVE the 0.0 line.
  • We only SELL when the lower MACD is BELOhe 0.0 line.

Here’s what I mean:


Rule #2

If the lower MACD is ABOVE the 0.0 line we look for the upper MACD (that’s the one with settings 3,5,3) to cross BELOW the 0.0 line and then ABOVE the 0.0 line.

Like this:


It is the exact opposite for a sell signal.

If the lower MACD is BELOW the 0.0 line we look for the upper MACD to cross ABOVE the 0.0 line and then cross back down BELOW the 0.0 line.

Like this:


Rule #3

Once we have Rule #1 and Rule #2 met we are then finally triggered into a trade if Rule #3 is met.

  • If we get BUY on Rules #1 and #2, we are ready to buy, but we only buy if the close is in the upper quarter of the candle.
  • If we get a SELL on Rules #1 and #2, we are ready to sell, but we only sell if the close is in the lower quarter of the candle.

See this example of a valid BUY signal:


This is an example of two invalid BUY signals:

That’s all there is to the rules!
We’ll now cover the exits…


Exit Rules


The Stoploss


The stoploss is very easy. All we do is place it a few pips below the low of our BUY candle; or place is a few pips above the high of our SELL candle.

A couple of examples:



Easy, eh?


The Take Profit


As you can expect from me now – the exit is as simple as everything else we have done so far. Where you take profit on a trade depends on how many lots YOU are trading.

If you can only trade 1 lot on your account then you will exit when your profit is equal to the number of pips you risked.

For example:


This is a great exit method that will give you a high percentage of winners.

Now, if you can trade two lots, you can exit the first lot at 1x the stoploss; and exit the second lot at 2x the stoploss. Like this:


If you three lots then you would exit the first at 1:1, the second at 2:1 and the third at 3:1.

I don’t think I need to show an example of that as I’m sure you understand the exit method now.


I recommend limiting your maximum take-profit to 2:1 or 3:1.

So, let’s say you trade nine lots, you could take profit if three lots at 1:1 (remember to change the stoploss on the remaining six lots to your entry price!), another three lots at 2:1 and the final three lots at 3:1.

I’ll like to say here that I recommend you try various exit strategies yourself – just to help your trading skills and knowledge in general.

You will see that Forex Pip Pirate™ manages to pick very good entries for you.

In all honesty, you can pretty much exit using any reasonable method you have ever learned and it will work – really!

Just be consistent in the exit method that you choose. Stick to it for every trade!


Real Trading & Tools


I’m not sure I really need to go through any real trades for you as the system really is simple to trade.

You’ve understood it completely so far, right?

Well, just in case, I’ll run through a few trades…

As I write this it is early (too early! ) on the morning of the 12th of July 2011.

Let’s start with the 5-min chart of EUR/USD from yesterday.

The following three charts show the London session and the start of US session (this is all I trade – I generally don’t trade the afternoon US session):




As I said previously, the Asian session is good for AUD, NZD and JPY pairs.

Here’s the AUD/USD during Asia last night:


I’m sure you’ve got a good idea of how Forex Pip Pirate™ works now.

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