5-8-13 Forex Scalping Trading Strategy
The 5-8-13 forex scalping trading strategy is a scalping technique that is based on the MACD_OsMA.ex4 custom indicator and the 5-8-13 exponential moving averages depicted by the red, blue and magenta lines respectively.
MetaTrader4 Indicators: MACD_OsMA.ex4 (default setting), 5-8-13 Exponential Moving Average (default setting)
Preferred Time Frame(s): 1-Minute, 5-Minutes, 15-Minutes
Recommended Trading Sessions: Any
Currency Pairs: any
Buy Trade Example (Click the picture for full size view)
Long Entry Rules
Place a buy order when the following chart rules or conditions are in display:
- If the 5 EMA (red) crosses the 8 EMA (blue) and the 13 EMA (magenta) upwards and they tend to form an intersection, it indicates that price is about to take an upward spin. Furthermore, sequel to such if a bullish candle closes above the 5 EMA (red), initiate a buy position.
- The MACD OsMA starts off with its silver line crossing the red line upwards, while its silver histograms forms above the 0.00. Once this setup is in place, it is an indication that price is pushing higher and does make sense to enter a buy.
Stop Loss for Long Entry: Place stop loss ~ 5 – 15 pips below entry price.
Exit Strategy/Take Profit for Long Entry
The following conditions or rules will define the exit/take profit strategy as shown below:
- If the price closes below the red line (5 EMA) on the activity chart, it is an indication of a looming reversal. Seemingly, if the EMA lines intersect after which price closes below the 5 EMA, it indicates price reversal to the down side.
- If the silver line of the MACD OsMA custom indicator crosses the red downward, it is a downward reversal signal.
Sell Entry Rules
Enter a sell if the following conditions or rules are on display on the activity chart:
- If the 5 EMA (red) crosses the 8 EMA (blue) and the 13 EMA (magenta) downwards and forms a somewhat intersection, it indicates that price is heading lower. Seemingly, if a bearish candle closes below the 5 EMA (red), initiate a sell order.
- If the silver line of the MACD OsMA custom indicator crosses the red line downward, while is silver colored histograms forms below the 0.00 level, it is an indication of downward price pressures.
Stop Loss for Sell Entry: Place stop loss ~ 5 – 15 pips above entry price.
Exit Strategy/Take Profit for Sell Entry
Exit or take profit on position(s) if the following conditions hold:
- If a bullish price bar forms above the 5 EMA line, owing to the intersection of the EMA lines, an exit or take profit is advised.
- If the silver line of the MACD OsMA crosses the red line upwards, it is a reversal signal, thereby prompting an exit or take profit strategy.
About The Trading Indicators
The MACD_OsMA.ex4 custom indicator designed after a Simple Moving Average (alert) and two EMAs (cross). Signals from this indicator are delivered when the MACD histogram is aligned above or below the 0 mark for bullish or bearish trend respectively.
The 5 EMA, 8 EMA and 13 EMA are drawn on the activity chart to plot the mean price while giving more weight to the latest price.