Making profits at short-term intervals from the market is a move a lot of traders find intriguing and are willing to engage in, but most times do not possess the skills to carry out such.
The Chandelier Exit forex strategy uses basic indicators to illustrate scalping in an efficient manner, deployed across the 1-Minute, 5-Minute and 15-Minute trading chart.
Chart Setup
MetaTrader4 Indicators: ChandelierExit.ex4 (default setting), cBB.ex4 (default setting)
Preferred Time Frame(s): 1-Minute, 5-Minute, 15-Minute
Recommended Trading Sessions: New York Open | London Open
Currency Pairs: Low spread pairs (max spread: 4 pips)
Download
Download the Chandelier Exit Forex Scalping Trading Strategy
Buy Trade Example
Fig. 1.0
Strategy
Long Entry Rules
Enter a buy in the market if the following rules or conditions take precedence:
- If price trades above the orange and black lines of the ChandelierExit.ex4 custom indicator, the market sentiment is said to be bullish i.e. a trigger to initiate a buy order. Note that when price trades in-between the orange and black lines of the ChandelierExit.ex4 custom indicator, in a fashion that makes it resemble a channel, price is said to be range bound, obviously not a good time to get in.
- If the red line of the cBB.ex4 custom indicator stays above the 50.00 signal level, price is said to be experiencing some bullish push i.e. a trigger to go long 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 price bar closes below both lines (orange and black) of the ChandelierExit.ex4 custom indicator as seen on Fig. 1.0, it is a signal to exit or take profit without delay.
- If the red line of the cBB.ex4 custom indicator dips below the 50.00 signal line, price is said to be in a reversal prior its earlier trend (bullish), as such an exit or take profit will suffice.
Sell Entry Rules
Enter a sell order if the following rules or conditions are in place:
- If price trades below the magenta and black lines of the ChandelierExit.ex4 custom indicator, the market sentiment is said to be bearish i.e. a trigger to initiate a sell order.
- If the red line of the cBB.ex4 custom indicator stays below the 50.00 signal level, price is said to be experiencing some downward push i.e. a trigger to go short 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 on position(s) entered if the following holds true:
- If the candlestick closes above both lines of the ChandelierExit.ex4 custom indicator during a bearish trend as seen on Fig. 1.1, it is a trigger to exit or take profit without delay.
- If the red line of the cBB.ex4 custom indicator ascends above the 50.00 signal line, price is said to be in a reversal prior its earlier trend (bearish), hence traders can exit or take profit accordingly.
Sell Trade Example
Fig. 1.1
Free Download
Download the Chandelier Exit Forex Scalping Trading Strategy
About The Trading Indicators
The ChandelierExit.ex4 was designed by Charles Le Beau and featured in Alexander Elder’s books, the Chandelier Exit.
It is widely used for setting stop-losses during a trend, however, the ChandelierExit.ex4 can also be used as a trend tool as seen in the examples cited above.
The cBB.ex4 custom indicator comes from the Bollinger Bands and is deployed in checking price penetration in the upper/lower bands of Bollinger Bands.