The double-pump EURUSD day trading strategy is a trend-following pattern that I use when day trading the 1-minute chart. Use it during the European Session or US session (but ideally NOT within the last three hours of the US session).

That’s between about 3 AM EST to 2 PM EST. The exact times aren’t important, we just want action, and action typically occurs between these times. Outside these times the price action is choppier, quieter, and the strategy will not work as well.

This pattern may work on other pairs, other time frames, or at different times of the day, but you’ll have to research that for yourself. I only day trade the EURUSD 1-minute chart. When I am day trading forex, it is typically between 8:00 and 11 AM EST (my charts are in Mountain Time, 6 AM on my chart is 8 AM EST).

I use a 2:1 or 2.5:1 reward:risk, depending on how much movement there is. The basic strategy is to let the price hit the stop loss or target. Don’t exit early unless there is a high-impact news announcement or another valid trade signal from another strategy occurs in the opposite direction. Another exception: if the price is very close to the target, but not filling the order, I will typically just manually close the trade right then.

That is the basic strategy, which can be modified to include a trailing stop loss, or different risk/reward that you find more profitable based on your research.

Double-Pump EURUSD Day Trading Strategy

A double-pump trade setup must occur in the current trend direction. Trend direction is determined by the most recent Impulse/Trending wave.

A double-pump in an uptrend looks like a small “W” where we’re entering near the second bottom as the price turns higher.

Here’s how the pattern is created and traded.

• An uptrend is in play.
  
  
• A drop, that doesn’t drop below any swing lows in the uptrend, and looks relatively small compared to the recent move up.
  
  
• A rally back to the high (within 1.5 pips).
  
  
• A drop back to the prior low (within 1.5 pips).
  
  
• A trigger to the uspide occurs: price moves above the high of a prior candle.
  
  
• Enter on the trigger to the upside. Once the bid price of the EURUSD is above the high of the prior candle, buy. Give it a second to see if the price keeps moving up. If it does, then send out the order. I use a market order.
  
  
• Place a stop loss below the low that just occurred.
  
  
• Target is placed at 2.5 x the risk.
  • If the stop loss is 3 pips, place a target 7.5 pips above the entry.
  • If the stop loss is 2.5 pips, place a target 6.2 or 6.3 pips above the entry.
• THESE TRADES OCCUR FAST. Be attentive. Constantly talk through the price action so you’re ready to pounce when the exact movement arrives.

Below are examples of double-pump (DP) strategy trades. There are examples of other strategies on these charts as well, but the focus here is on the DPs.

The third trade on the chart below is a double pump within an uptrend. The price is making progress to the uspide, it drops back, pushes back to the swing high, drops back down, and moves above the high of a prior candle (entry). The red box represents the risk of the trade with the bottom of the red box being the stop loss location. The top of the green box represents the target. The line between green and red is the entry point.

“R” is our profit or loss in standardized units. For example, if we risk 1% of our account on a trade, a 1R loss means we lost 1% of the account. If we made 2.5R we made 2.5%. R can be any unit you want, such as $100, $5, or 0.5%, for example. If R is $100, that means you make $150 on a 1.5R trade, or lost $120 if you lost 1.2R.

I publish charts each day with the various patterns I trade on Twitter.

I actually missed this trade and lost out on a quick 2.5:1 trade. While the highs and lows are a tiny bit different they are within 1.5 pips of each other.

Another way to think of it is that the double pump pattern looks like a tiny range or square.

Here’s another example.

My EURUSD Day Trading Course teaches you how to day trade the EURUSD in 2 hours or less a day, with the potential to make double-digit percentage returns each month (with practice) with patterns that tend to occur almost every day.

Downtrend Version of the Double Pump EURUSD Day Trading Strategy

The concept for a double pump in a downtrend is the same. Except now we need a downward price move with an “M” pattern. We are entering on the second peak as the price triggers back to the downside. The stop loss goes above the recent swing high that just occurred, and a target is placed at 2.5x the risk.

The first trade on the chart below is a classic example of a double pump EURUSD day trading strategy.

The price drops, has a little bounce off the low, drops back to near the low (within 1.5 pips, above or below), and then rallies back up to near the prior little swing high (within 1.5 pips, above or below).

With all the conditions met, we’re waiting for the price to drop below a candle low, this occurs on the big red down bar. We don’t wait for the candle to complete. We enter as the price drops below a candle low coming off of the top of the “M”.

This particular trade had only had about 2 pips of risk, so our target is placed at 5 pips below the entry for a 2.5:1 reward:risk.

If risking 1% of our account on this trade, we make a quick 2.5%.

I actually recorded myself day trading on the day above. Watch the video here as I talk through the trades in real-time.

The third trade, on the chart below, is also a double pump in a downtrend. While it worked out. This is actually a mediocre pattern, and one I often won’t take because the pattern is so large. The full pattern is almost as big as the drop that preceded it (this violates the guidelines).

The fourth trade is also a DP, but an invalid one (mistake). The second low was more than 1.5 pips above the first. See how angled it looks? Not a good trade. I took it but determined it was a mistake; not because I lost, but because I didn’t follow the rules.

And of course, not all these patterns work out. Only a bit more than half of these trades will produce a winner. Yet it can still be a very profitable strategy because of the reward: risk. Some statistics are discussed below.

The first trade on the chart below failed, but then quickly transitioned into another strategy I trade. There is also another DP on the far right, after I was finished trading.

Here’s another example.

And another example.

How The Double Pump EURUSD Day Trading Strategy Performs

The strategy has about a 50% win rate over. This can be improved on (or made worse) by utilizing different exits (trailing SLs or different R:R ratios).

In January 2021 the strategy produced 12.93R for the month, in the 2-hour window I trade. R is a standardized measure of risk.

So if you risked 1% per trade, the strategy produced 12.93%.

Risking 0.5% per trade, it produced 6.465%, or risking 2% per trade it produced 25.86% for the account.

In February 2021 the strategy produced 28.79R, in the 2-hour window I trade.

Weekly and monthly updates on the strategies are posted on the site under the Forex >Forex Trades and Analysis section. If you click back in time you will see many weeks and months wroth of these statistics.

As of 2022, I no longer post the stats on the website, as it was taking up too much of my weekend, but I do still post all the charts every month or so.

How many trades there are each month varies. It also depends on how closely I am watching for them. I have other strategies I trade, so sometimes I’m more focused on those and other times I’m more focused on DPs. Some months have few DPs, other months have many. Therefore, it’s best to combine this strategy with others.

You may also want to check out the Snap Back Strategy.

Other Considerations for the Double Pump EURUSD Day Trading Strategy

I don’t take trades right before news, nor do I hold trades through major economic news announcements. I look at an economic calendar as part of my morning routine and get out of trades prior to the news events marked as medium- or high-impact in the USD or EUR.

I don’t take new day trades if there is less than approximately 15 pips of movement in the last two hours. This is a guideline, not a rule. I just need to see enough movement to likely compensate me for my risk.

This pattern should be relatively small compared to the price move preceding it. The pattern is a big up or down move, followed by this relatively small double pump pattern. If the pattern gets too big, it loses its power. The pattern should be smaller than the last wave of the trend. For example, if the price moved higher, and then pulled back, and then moved to a new high, if a double pump occurs after this it should be smaller than the size of the last move up. Go through the examples above and you will see the pattern is a portion (smaller) than the size of the price wave immediately preceding the double pump.

The price waves of the DP pattern should be distinct. Not just a bunch of sideways price bars all the same size (a consolidation). We want to see the little price waves on those W and M patterns clearly and distinctly.

This pattern is what I call a symmetrical double-pump because the swing highs and lows are very similar and create a small little range. We will often see non-symmetric double pumps too. This is where the highs and lows are at different levels. This requires more patience, and I don’t trade “skewed” patterns the same way I trade symmetric double pumps. For skewed patterns, the trade setup is different, and I call it a Double Pump Variation (DPV).

For some examples of the DPV, check out my daily charts on Twitter, along with examples of rounded tops and bottoms (RT, RB) which is another strategy I regularly use. These strategies are covered in the EURUSD day trading course.

By Cory Mitchell, CMT

My EURUSD Day Trading Course teaches you how to day trade the EURUSD in 2 hours or less a day, with the potential to make double-digit percentage returns each month (with practice) with patterns that tend to occur almost every day.