5-Minute Forex Scalping Strategy For EUR/CHF
The 5-minute Forex scalping strategy for the EUR/CHF pair combines the best market trends with event levels to yield the best possible trade signals for scalping purposes.
It achieves this by applying 3 distinct MT4 scalping trading indicators that can guide traders towards making the right market decisions.
This strategy has been tested successfully on the EUR/CHF currency pair but can be applied to any other pair as well, preferable low spread pairs.
MetaTrader 4 Indicators: SimpleMovingAveragesSignals.ex4 (Inputs Variable Modified; FasterSMA=16, SlowerSMA=32, Colors Width Modified; #0=4, #1=4), MFI_price.ex4 (Inputs Variable Modified; ExtMFIPeriod=24), Commodity Channel Index.ex4 (Parameters Modified; Period=34)
Preferred Time Frame(s): 1-Minute, 5-Minute
Recommended Trading Sessions: London, New York
Currency Pairs: EUR/CHF + any other pair
Buy Trade Example: EUR/CHF (EURO / Swiss Franc), M5 Chart
Long Entry Rules
Initiate a buy entry if the following indicator or chart pattern gets put on display:
- If the SimpleMovingAveragesSignals custom indicator pops up a spring green upward pointing arrow that is aligned somewhat below the candlesticks as depicted on Fig. 1.0, price is said to be driven to the upside i.e. a signal to buy the currency pair of interest.
- If the blue line of the MFI_price custom indicator breaks and stays above the 50.00 horizontal level as exemplified on Fig. 1.0, the general market sentiment is said to be bullish, thus a trigger to buy the underlying forex pair.
- If the light sea green line of the Commodity Channel Index Metatrader 4 forex indicator breaks& hovers above the zero reference line (see Fig. 1.0), it typifies upward price pressures, hence a signal to buy the stipulated fx 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 SimpleMovingAveragesSignals indicator displays a red downward pointing arrow, bulls are said to be leaving the market increasingly, as such an exit or take profit stance is recommended.
- If the blue line of the MFI_price indicator suddenly dips below the 50.00 level while a bullish signal is running, it is pointing to a likely bearish reversal, hence a trigger to exit or take profit forthwith.
- If during the course of a bullish trend, the light sea green line of the CCI indicator drops below the zero center line (see Fig. 1.0), it is pointing to a likely U-turn in price action, as such an exit or take profit stance will suffice.
Sell Entry Rules
Enter a sell order if the following holds true:
- If the SimpleMovingAveragesSignals custom indicator pops up a red downward pointing arrow that is positioned fairly above the price bar as shown on Fig. 1.1, market is said to be in support of lower prices i.e. a signal to go short on the currency pair of focus.
- If the blue line of the MFI_price custom indicator dips and runs below the 50.00 reference level as illustrated on Fig. 1.1, the overall market sentiment is said to be bearish, therefore a sell alert is said to be imminent.
- If the light sea green line of the Commodity Channel Index indicator dips and runs below the zero reference line as demonstrated on Fig. 1.1, it represents downward price pressures, hence a signal to sell the currency pair of focus.
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 during the course of a bearish trend, the SimpleMovingAveragesSignals indicator pops up a spring green upward pointing arrow on the activity chart, it is signaling a probable end in bearish sentiment, as such an exit or take profit stance will suffice.
- If the blue line of the MFI_price indicator unexpectedly surges above the 50.00 level while a bearish trend is ongoing (checkout Fig. 1.1), it is pointing to a possible bullish reversal, hence an exit or take profit stance will do.
- If the light sea green line of the CCI indicator breaks above the zero center line, bears power is said to be weaning, as such an exit or take profit stance is highly advised.
Sell Trade Example: EUR/CHF (EURO / Swiss Franc), M5 Chart
About The Forex Technical Indicators Used
The SimpleMovingAveragesSignals is a trend indicator that is based on the simple moving average.
It uses a 9 and 18 default value for the faster SMA and slower SMA respectively.
The MFI_price or Money Flow Index (MFI) is also known as volume-weighted RSI and was designed by Gene Quong and Avrum Soudack.
The MFI_price indicator for MetaTrader4 is an oscillator that deploys both price and volume in gauging buying and selling pressures in the market.
The Commodity Channel Index or CCI is a momentum based indicator that falls under the oscillator classification.
Regardless of its name, the CCI is not exclusively designed for the commodity market, but can be used in the forex market to gauge overbought/oversold conditions, as well as spot trends.
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