5-Minute Forex Scalping Strategy For AUD/JPY
The 5-Minute Forex scalping strategy for the AUD/JPY pair is a simple cross-over trading strategy that works in agreement with an oscillator for fast entry and exit.
In order to capture price action on this strategy optimally, users need to implement this strategy on the lower time frames (M1 and M5).
The strategy is not designed to get big wins at all times, but rather concentrates on raking in small wins over a long period for an overall kill.
MetaTrader 4 Indicators: LinearRegSlope_v1.ex4 (Inputs Parameters Modified; Length=28), Moving Average.ex4 (Parameters Modified; Period=38, Style=blue), MA_ALERT.ex4 (Colors Width Modified; #0=2)
Preferred Time Frame(s): 1-Minute, 5-Minute
Recommended Trading Sessions: London, New York, Tokyo
Currency Pairs: AUD/JPY + any other pair
Buy Trade Example: AUD/JPY (Australian Dollar / Japanese Yen), M5 Chart
Long Entry Rules
Initiate a buy entry if the following indicator or chart pattern gets put on display:
- If the blue line of the 38 SMA Metatrader 4 forex indicator crosses below the red MA_ALERT custom indicator line in a bottom up manner as seen on Fig. 1.0, bulls are said to be driving price higher, hence a trigger to buy the currency pair of interest
- If the sky blue line of the LinearRegSlope_v1 custom indicator breaksand hovers above the zero horizontal level as shown on Fig. 1.0, price is said to be pressured to the upside, as such a buy alert will suffice.
Stop Loss for Buy Entry: Place stop loss 3 pips below short-term support.
Exit Strategy/Take Profit for Buy Entry
Exit or take profit if the following rules or conditions takes precedence:
- If while a bullish trend is running, the blue line of the 38 SMA indicator intersects the red MA_ALERT indicator line, bulls are said to be backing out of the market increasingly, therefore it is a trigger to exit or take profit forthwith.
- If the sky blue line of the LinearRegSlope_v1 custom indicator breaksbelow the 0.00 reference level during the course of a bullish trend (see Fig. 1.0), it is pointing to diminishing bulls power, as such an exit or take profit stance is recommended.
Sell Entry Rules
Enter a sell order if the following holds true:
- If the blue line of the 38 SMA forex indicator crosses above the red MA_ALERT custom indicator line in a top downward fashion as exemplified on Fig. 1.1, bears are said to be driving sentiment, thus a signal to go short on the designated forex pair.
- If the sky blue line of the LinearRegSlope_v1 custom indicator dips and runs below the zero reference level as depicted on Fig. 1.1, the overall market sentiment is said to be bearish, as such a sell alert will do.
Stop Loss for Sell Entry: Place stop loss 3 pips above short-term resistance.
Exit Strategy/Take Profit for Sell Entry
Exit or take profit if the following takes center stage:
- If the blue line of the 38 SMA indicator intersects the red MA_ALERT indicator line while a bearish trend is ongoing, more and more bears are said to be closing their positions, therefore it is a trigger to exit or take profit straightaway.
- If the sky blue line of the LinearRegSlope_v1 custom indicator surges above the 0.00 horizontal level while a bearish trend is running (refer to Fig. 1.1), it is signaling a likely end in bearish momentum, as such an exit or take profit stance is advised.
Sell Trade Example: AUD/JPY (Australian Dollar / Japanese Yen), M5 Chart
About The Forex Technical Indicators Used
The LinearRegSlope_v1 custom indicator is deployed in spotting the direction and strength of a leading market trend.
Technical traders use this indicator to determine if the market is in an upward or downward trend.
The indicator also gauges the intensity of surge or decline, in line with the previous trend or prices.
The 38 SMA (Simple Moving Average) is a technical analysis indicator that smooths out currency price data by constantly creating an updated average price over 38 periods.
The MA_ALERT is a moving average type that filters out noise from random price actions and it has a default value of 14 for the maPeriod variable.
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