Forex Day Trading Strategy For Metatrader 5

The Forex Day Trading strategy for Metatrader 5 allows you to open and close trades within the same trading day.

It’s a trend following strategy composed of a simple crossover system together with an oscillator for better trade entries and exits.

For day trading the forex market, experiment with the following timeframes: M5, M15, M30 and H1.

The Forex Day Trading strategy can also be used to for swing trading purposes, in this case, trade off the H4 chart.

Lets put everything together, to give you a proper understanding of how this trading strategy works.

Trade Setup 

MetaTrader 5 Indicators: Moving Average.ex5 (Parameters Modified; Period=60, Style=Magenta), Corr generalized DEMA.ex5 (Default Setting), Coppock.ex5 (Inputs Variable Modified; Period=24)

Trade Style: Day trading, swing trading

Trading Sessions: London | New York | Tokyo

Currency Pairs: Majors, cross pairs, exotics

Platform: Metatrader 5 (MT5)

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Download the Forex Day Trading Strategy For Metatrader 5

Buy Trade Example: AUDUSD, H1 Chart

Fig. 1.0

Trading Strategy Rules For Buy and Sell Trades Explained

Buy Entry

Enter a buy trade if the following trading conditions are met:

  1. If the magenta line of the 60 SMA Metatrader 5 forex indicator crossesbelow the somewhat medium sea green line of the Corr generalized DEMA custom indicator (see Fig. 1.0), price is said to be driven to the upside i.e. a trigger to buy the currency pair of interest.
  2. If the dark olive green line of the Coppock custom indicator breaks above the 0.00 horizontal level as illustrated on Fig. 1.0, the overall market sentiment is said to be bullish i.e. a signal to go long on the selected currency pair.

Suggested Stop Loss for Buy Entry: Place stop loss below the magenta colored line.

Suggested Exit Strategy/Take Profit for Buy Trade

Exit the buy trade if the following trading conditions are met:

  1. If while a bullish trend is running, the magenta line of the 60 SMA technical indicator intersects the orange red line of the Corr generalized DEMA indicator, it is pointing to a likely bearish reversal, as such an exit or take profit will suffice.
  2. If the dark olive green line of the Coppock forex indicator falls below the 0.00 horizontal level during the course of a bullish signal (refer to Fig. 1.0), it is a trigger to exit or take profit at once.

Sell Entry

Open a sell trade if the following trading conditions are met:

  1. If the magenta line of the 60 SMA forex indicator crossesabove the slightly orange red line of the Corr generalized DEMA custom indicator as illustrated on Fig. 1.1, price is said to be pressured lower i.e. a trigger to go short on the designated forex pair.
  2. If the dark olive green line of the Coppock custom indicator dips below the 0.00 reference level as shown on Fig. 1.1, the general market sentiment is said to be bearish, therefore a sell signal is said to be on the horizon.

Suggested Stop Loss for Sell Entry: Place stop loss above the magenta colored line.

Suggested Exit Strategy/Take Profit for Sell Entry

Exit the sell trade if the following trading conditions are met:

  1. If the magenta line of the 60 SMA technical indicator intersects the medium sea green line of the Corr generalized DEMA while a bearish signal is ongoing, it is signaling a likely end to the current trend, therefore exit or take profit stance is advised.
  2. If the dark olive green line of the Coppock forex indicator breaks above the 0.00 horizontal level while a bearish trend is ongoing as illustrated on Fig. 1.1, it is a trigger to exit or take profit immediately.

Sell Trade Example: AUDUSD, H1 Chart

Fig. 1.1

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MT5 Trading Indicators Used For This Strategy

The 60 SMA (Simple Moving Average) is a technical analysis indicator that smooths out price data by constantly creating an updated average price.

The Corr generalized DEMA is a technical indicator that applies “correcting” method on the Generalized DEMA to yield the new “corrected” generalized DEMA.

Its development is credited to Dr. Alexander Uhl and it is also known to be used for quick trend assessment.

The Coppock custom indicator is a technical study that is built on three different Moving Averages i.e. Exponential, Linear Weighted, and the Simple Moving Averages.

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