A simple forex trading strategy that runs on basic indicators and can be applied to low spread FX pairs.
Being a strategy designed for scalping, it can be traded on the 1-Minute, 5-Minute and the 15-Minute trading charts. Learn how it works below.
Chart Setup
MetaTrader4 Indicators: BSTrend.ex4 (default setting), Big Trend.ex4 (default setting)
Preferred Time Frame(s): 1-Minute, 5-Minute, 15-Minute
Recommended Trading Sessions: London and New York
Currency Pairs: Low spread (Max 4 pips)
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Buy Trade Example
Fig. 1.0
Strategy
Long Entry Rules
Initiate a buy position in the market if the following rules or conditions holds true:
- If the line of the Big Trend custom indicator is painted light blue, with price trading somewhat above it, then we can say that price is being pressured higher i.e. a trigger to enter long position(s).
- If the bars of the BSTrend.ex4 custom indicator are painted deep sky blue, while being aligned above the 0.00 signal level, it is an indication that price is being pushed to the upside i.e. a signal to go bullish on the pair of interest.
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 indicator or chart pattern gets displayed:
- If the line of the Big Trend custom indicator turns tomato, it is signaling a possible reversal in the current trend, as such an exit or take profit is appropriate.
- If the violet bars of the BSTrend.ex4 custom indicator realigns to form below the 0.00 signal as shown on Fig. 1.0, it is a signal that buying pressures are weaning, as such an invitation to exit or take profit on position(s) opened.
Sell Entry Rules
Enter a sell in the market if the following rules or conditions hold sway:
- If the line of the Big Trend custom indicator is painted tomato, with price trading somewhat below it, then we can say that price is being pressured to the down side i.e. a trigger to go short.
- If the bars of the BSTrend.ex4 custom indicator are painted violet, while being aligned below the 0.00 signal level, it is an indication that price is being pushed to the downside i.e. a signal to go bearish on the pair of interest.
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 chart or indictor pattern gets displayed:
- If the line of the Big Trend custom indicator turns light blue during a downtrend, it is a trigger that bullish momentum is building i.e. a signal to exit or take profit.
- If the deep sky blue bars of the BSTrend.ex4 custom indicator realigns to form above the 0.00 signal as shown on Fig. 1.1, it is a signal that sellers are exiting the market, as such a call to exit or take profit on position(s) opened.
Sell Trade Example
Fig. 1.1
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About The Trading Indicators
The BSTrend.ex4 indicator is best suited for scalpers and it deploy colored bar within its indicator window to define bullish (deep sky blue) and bearish (violet) market sentiments.
The Big Trend is a trend following indicator that resembles the moving averages, but in its case depicts bullish and bearish price actions via the color of its filled line i.e. light blue for buy signals and tomato for bearish trend.