Forex Scalping Strategy With MACD And Stochastic Indicator
This scalping strategy works with the 1-minute time frame.
It’s quite simple to understand and is composed of the Stochastic indicator and MACD.
Indicators: Stochastic with settings: (5,3,3) and MACD with settings: (13,26,9)
Preferred time frame(s): 1 min chart
Trading sessions: Euro ans US Sessions
Preferred Currency pairs: Medium to high volatility pairs (EUR/USD, GBP/USD, USD/JPY, GBP/JPY, EUR/JPY,…)
GBP/USD 1 Min Chart Example
Long Trade Setup:
- The MACD indicator must be above the zero line (bullish territory).
- Wait for the Stochastic indicator to go back above 20 from below (oversold).
This is the signal to enter a long position.
Place stop loss 1 pip below the most recent swing low point.
Price objective: Set at 10 pips above the entry point.
Short Trade Setup:
- The MACD indicator must be below the zero line (bearish territory).
- Wait for the Stochastic indicator to go back below 80 from above (overbought).
This is the signal to enter a short position.
Place stop loss 1 pip above the most recent swing high point.
Price objective: Set at 10 pips below the entry point.
The GBP/USD 1 minute chart provided us with 3 short signals. Two trades were closed for 10 pips profit each (20 pips total). The last trade hasn’t achieved the profit target yet.