5-Minute Forex Scalping Strategy For USD/JPY

Mastery of scalping during currency trading can be quite challenging.

A good forex scalping strategy does not necessarily lookout for big profits from a single trade, instead it optimizes the win-to-loss ratio across numerous trades.

During scalping, it is crucial to always imbibe the quick booking of small profits along with losses as they appear on the activity chart.

The 5-Minute Forex Scalping Strategy For USD/JPY works great and can be executed on both long and short positions as shown below.

Chart Setup

MetaTrader4 Indicators: PUX_CCI.ex4 (Colors Modified; #1=None), ADX_MA_BO.ex4 (Inputs Variable Modified; Ma_Period=36, CountBars=50000000)

Preferred Time Frame(s): 1-Minute, 5-Minute, 15-Minute

Recommended Trading Sessions: London and New York

Currency Pairs: USD/JPY and any other low spread currency pair

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Download the 5-Minute Forex Scalping Strategy For USD/JPY

Buy Trade Example

Fig. 1.0

Strategy

Long Entry Rules

Initiate a buy entry if the following indicator or chart pattern gets put on display:

  1. If the ascending blue dots of the ADX_MA_BO Metatrader 4 forex indicator gets displayed on the activity chart as exemplified on Fig. 1.0, the overall market sentiment is said to be bullish, as such a signal to go long is in sight.
  2. If the sienna line and mostly green histograms of the PUX_CCI Metatrader 4 forex indicator gets positioned above the zero level, a buy signal is said to be in place.

Stop Loss for Buy Entry: Place stop loss below immediate support.

Exit Strategy/Take Profit for Buy Entry

Exit or take profit if the following rules or conditions takes precedence:

  1. If the blue ascending dots of the ADX_MA_BO indicator reverts to red during a bullish signal, price is said to be heading downward, as such an exit or take profit is recommended.
  2. If the sienna line of the PUX_CCI indicator breaks below the zero center line during a bullish trend (see Fig. 1.0), price is said to losing steam, hence it is recommended that all long running orders are exited or profits terminated at once.

Sell Entry Rules

Initiate a sell entry if the following holds true:

  1. If the descending red dots of the ADX_MA_BO Metatrader 4 forex indicator gets aligned somewhat above the candlesticks as depicted on Fig. 1.1, the general market sentiment is said to be bearish, as such a sell alert will suffice.
  2. If the sienna line and mostly red histograms of the PUX_CCI Metatrader 4 forex indicator gets placed below the zero reference level, a sell signal is said to be in place.

Stop Loss for Sell Entry: Place stop loss above immediate resistance.

Exit Strategy/Take Profit for Sell Entry

Exit or take profit if the following holds sway:

  1. If the red descending dots of the ADX_MA_BO indicator readjust to form a blue dot during a bearish signal, price is said to be taking a new upward direction, as such an exit or take profit is advised.
  2. If the sienna line of the PUX_CCI indicator breaks above the zero center line while a bearish trend is running (refer to Fig. 1.1), bearish tendencies is said to be weaning i.e. a trigger to exit or take profit immediately.

Sell Trade Example

Fig. 1.1

Free Download

Download the 5-Minute Forex Scalping Strategy For USD/JPY

About The Trading Indicators

The PUX_CCI.ex4 is a trend momentum that is designed around the Pux CCI indicator.

It is most effective on majors with low spreads.

The ADX_MA_BO.ex4 custom indicator is an enhanced Average Directional Index (ADX) that is trend following with integrated smoothing filter.

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