Scalping doesn’t necessarily have to portray a complex system with plenty technical indicators bleeping signals on your chart screen.
One of the many rules of surviving the currency market is to keep things simple, and in doing so, we have decided to deploy a combination of two unique technical indicators that are efficient enough to allow scalpers make consistent profits.
This strategy won’t keep your buy/sell positions open in the market for a long time, instead they will be closed the same trading day or much earlier.
The entry and exit techniques that are contained in this strategy will require you checking your charts perhaps a couple of times, depending on your frequency of trades.
Dummies, as well as experienced traders can incorporate this system into their trading plan.
MetaTrader 4 Indicators: Alligator.ex4 (Parameters Modified; Jaws period=18, Teeth period=13, Lips period=10), QQE.ex4 (Inputs Variable Modified; Smoothing=7)
Preferred Time Frame(s): 1-Minute, 5-Minute, 15-Minute
Recommended Trading Sessions: London, New York, Tokyo
Currency Pairs: CAD/CHF + any other low spread pair
Buy Trade Example: CAD/CHF (Canadian Dollar / Swiss Franc), 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 Alligator Metatrader 4 indicator crosses the lime and red lines in a bottom up manner as indicated on Fig. 1.0, bulls are said to be driving price higher, therefore a buy alert is said to be imminent.
- If the blue line of the QQE custom indicator breaksand runs above the 50.00 horizontal level as illustrated on Fig. 1.0, bulls are said to be driving leading market sentiments, thus a trigger to buy the designated currency pair.
Stop Loss for Buy Entry: Place stop loss 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 ongoing, the red line of the Alligator forex indicator intersects the lime line, bulls power is said to be weaning, thus an exit or take profit stance is recommended.
- If the blue line of the QQE custom indicator dips below the 50.00 reference level while a bullish trend is on course (refer to Fig. 1.1), it is pointing to diminishing bulls strength, as such an exit or take profit stance is advised.
Sell Entry Rules
Enter a sell order if the following holds true:
- If the blue line of the Alligator forex indicator crosses the lime and red lines in a top downward fashion as exemplified on Fig. 1.1, the general sentiment is said to be bearish i.e. a signal to go short on the currency pair of interest.
- If the blue line of the QQE indicator dips below the 50.00 reference level as depicted on Fig. 1.1, the overall market sentiment is said to be bearish, therefore a sell signal is said to be on the horizon.
Stop Loss for Sell Entry: Place stop loss above short-term resistance.
Exit Strategy/Take Profit for Sell Entry
Exit or take profit if the following takes center stage:
- If the red line of the Alligator forex indicator intersects the lime line while the bearish trend is on course, bears power is said to be halting, thus a trigger to exit or take profit immediately.
- If while the bearish trend is on course, the blue line of the QQE custom indicator spikes above the 50.00 signal level (refer to Fig. 1.1), bears are said to be leaving the market in their droves, as such an exit or take profit stance will suffice.
Sell Trade Example: CAD/CHF (Canadian Dollar / Swiss Franc), M5 Chart
About The Forex Technical Indicators Used
The Alligator is a technical indicator by Bill Williams, introduced in 1995.
The indicator is comprised of three lines that are overlaid on the activity chart.
The lines represent the jaw, the teeth and the lips of the Alligator.
Forex traders tend to use this indicator to gauge trend and its likely direction.
The QQE is short for Qualitative Quantitative Estimation and represents a Metatrader 4 forex indicator that uses the smoothed Moving Average of Relative Strength Index indicator.
It is therefore an oscillator that tries to find discrepancies in which price forms a new maximum, while overcoming the level of its previous maximum.
Start using this forex strategy in just 5 minutes. Click here to get started now.