5-Minute Forex Scalping Strategy For EUR/GBP
The 5-minute Forex scalping strategy for the EUR/GBP pair uses a signal system that is based on a well-defined indicator patterns to signal for fast trend changes.
The scalping strategy is designed to eliminate the hassles of analyzing the market and keeps the market participants in a calm state when trading the currency market.
This strategy is known to work well for scalping and intraday purposes because it suits lower and medium term time frames.
Additionally, it is possible to deploy this strategy to trade just about any currency pair that’s available on the MT4 chart.
MetaTrader 4 Indicators: SMMA-Crossover_Signal.ex4 (Colors Width Modified; #0=4, #1=4), ADX Candles.ex4 (Inputs Variable Modified; ADXPeriod=28, Colors Modified; #0=Lime, #1=Red, #4=Lime, #5=Red, Colors Width Modified; #0=3, #1=3, #2=3, #4=3, #5=3), MACD.ex4 (Parameters Modified; Fast EMA=17, Slow EMA=31, MACD SMA=14)
Preferred Time Frame(s): 1-Minute, 5-Minute, 15-Minute, 30-Minute, 1-Hour
Recommended Trading Sessions: Any
Currency Pairs: EUR/GBP + any other pair
Buy Trade Example: EUR/GBP (EURO / Great British Pound), M5 Chart
Long Entry Rules
Initiate a buy entry if the following indicator or chart pattern gets put on display:
- If the spring green upward pointing arrow of the SMMA-Crossover_Signal custom indicator pops up slightly below the candlesticks as depicted on Fig. 1.0, the general market sentiment is said to be bullish i.e. a signal to buy the selected fx pair.
- If the ADX Candles forex indicator places lime bars that are superimposed on the candlesticks as shown on Fig. 1.0, market is said to be gunning for higher prices, thus a signal to buy the designated currency pair.
- If the silver histograms of the MACD Metatrader 4 indicator align above the 0.00 reference level,as seen on Fig. 1.0, it is signaling more buyers interest in the market i.e. a trigger to buy the stipulated fx pair forthwith.
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 the SMMA-Crossover_Signal indicator pops up a red downward pointing arrow during the course of a bullish trend, it is signaling bulls power exhaustion, thus a trigger to exit or take profit at once.
- If the ADX Candles custom indicator displays a red candle superimposed on the candlestick (refer to Fig. 1.0), bulls power is said to be weaning, therefore an exit or take profit stance will suffice.
- If the MACD forex indicator pops up a silver histogram below the zero horizontal level while a bullish trend is running, more and more bulls are said to be closing their positions, thus an exit or take profit stance is recommended.
Sell Entry Rules
Enter a sell order if the following holds true:
- If the red downward pointing arrow of the SMMA-Crossover_Signal custom indicator pops up somewhat above the candlesticks as illustrated on Fig. 1.1, the overall market sentiment is said to be bearish i.e. a signal to sell the designated currency pair.
- If the ADX Candles forex indicator positions red bars that are superimposed on the candlesticks as depicted on Fig. 1.1, market is said to be in favor of downward pressures, therefore a sell alert is said to be imminent.
- If the silver histograms of the MACD indicator line up below the 0.00 horizontal level as exemplified on Fig. 1.1, it is pointing to a likely exhaustion in bears market i.e. a trigger to sell the currency pair of interest.
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 while a bearish trend is running and the SMMA-Crossover_Signal indicator pops up a spring green upward pointing arrow, a bullish reversal is said to be on the horizon, thus a trigger to exit or take profit without delay.
- If during the course of a bearish trend the ADX Candles custom indicator displays a lime candle superimposed on the candlestick (see Fig. 1.1), bears power is said to be diminishing, therefore an exit or take profit stance will do.
- If the silver histogram of the MACD forex indicator readjust to show up above the zero horizontal while a bearish trend is on course, bears are said to be closing their positions increasingly, thus an exit or take profit stance is duly advised.
Sell Trade Example: EUR/GBP (EURO / Great British Pound), M5 Chart
About The Forex Technical Indicators Used
The SMA-Crossover_Signal is a technical tool that uses arrows to show the crossover of two simple moving averages; one faster SMA and a slower SMA.
The ADX Candles custom indicator superimposes its color on the candlesticks, giving traders clearer information regarding bullish (lime) and bearish (red) candlesticks.
The Moving average convergence divergence (MACD) is a trend-following momentum indicator that reveals the connection between two moving averages of price.
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