Simple Candlesticks Forex Scalping Strategy

The Simple Candlesticks Forex Scalping strategy is an awesome short-term trading strategy that offers traders with not only a trick of entering trades on the shorter timeframes but also a trick of managing positions on M1, M5, M15 and M30 charts.

So, this is a great strategy for scalping and day trading pairs.

The flexibility and relative simplicity of the Simple Candlesticks Forex Scalping strategy definitely makes it a useful addition to your trading toolbox.

Chart Setup

MetaTrader 4 Indicators: candlesticks-signals.ex4 (Default Setting), kaufman-bands (Inputs Variable Modified; periodAMA=18), kg-wave-minor.ex4 (Colors Width Modified; #1=2, #2=2)

Preferred Time Frame(s): 1-Minute, 5-Minute, 15-Minutes, 30-Minutes

Recommended Trading Sessions: London and New York

Currency Pairs: Any pair

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Buy Trade Example

Fig. 1.0

Strategy

Long Entry Rules

Enter a bullish trade if the following indicator or chart pattern gets put on display:

  1. If the lime upward pointing arrow of the candlesticks-signals Metatrader 4 forex indicator gets positioned somewhat below the candlesticks as seen on Fig. 1.0, price is said to be driven to the upside i.e. a trigger to go long on the designated forex pair.
  2. If the deep sky blue dotted sienna line of the kaufman-bands custom indicator stay slightly below the candlesticks as shown on Fig. 1.0, the overall market sentiment is said to be bullish, therefore a buy trigger is apt.
  3. If the histograms (blue & red) of the kg-wave-minor indicator gets stacked above the 0.00 horizontal signal level as illustrated on Fig. 1.0, price is said to be favoring pressures to the upside, thus a buy will suffice.

Stop Loss for Buy Entry: Place stop loss 1- 3 pips below short-term support.

Exit Strategy/Take Profit for Buy Entry

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

  1. If while a bullish trend is ongoing, the candlesticks-signals indicator displays a red downward pointing arrow (refer to Fig. 1.0), it is a trigger to exit or take profit at once.
  2. If the kaufman-bands custom indicator pops up a gold signal dot on its sienna line during a bullish trend, it is indicative of a diminishing bulls power, therefore an exit or take profit is recommended.
  3. If the kg-wave-minor indicator pops up a red histogram below the 0.00 horizontal level while a bullish trend is running, a bearish reversal is said to be looming, therefore an exit or take profit will do.

Sell Entry Rules

Go short if the following setups gets displayed rightly on the activity chart:

  1. If the red downward pointing arrow of the candlesticks-signals forex indicator gets positioned slightly above the price bars as illustrated on Fig. 1.1, price is said to be driven to the downside i.e. a trigger to go short on the selected fx pair.
  2. If the gold dotted sienna line of the kaufman-bands custom indicator stay fairly above the candlesticks as exemplified on Fig. 1.1, the overall market sentiment is said to be bearish, thus a sell stance is appropriate.
  3. If the histograms (blue & red) of the kg-wave-minor indicator gets stacked below the 0.00 horizontal signal level as depicted on Fig. 1.1, price is said to give preferentiality to pressures to the downside, thus a sell will do.

Stop Loss for Sell Entry: Place stop loss 1-3 pips above short-term resistance.

Exit Strategy/Take Profit for Sell Entry

Exit or take profit if the following takes center stage:

  1. If while a bearish trend is running, the candlesticks-signals indicator displays a lime upward pointing arrow (check Fig. 1.1), it is a trigger to exit or take profit immediately.
  2. If the kaufman-bands custom indicator pops up a deep sky blue signal dot on the sienna line during a bearish trend, it is indicative of a weaning bears power, therefore an exit or take profit is advised.
  3. If the kg-wave-minor indicator pops up a blue histogram above the 0.00 horizontal alert level during a bearish trend, a bullish reversal is said to be imminent, therefore an exit or take profit will do.

Sell Trade Example

Fig. 1.1

Free Download

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About The Trading Indicators

The candlesticks-signals indicator is a trend tool that plots a lime upward and red downward pointing arrows to depict bullish and bearish price sentiment in that order.

The kaufman-bands indicator was developed by Perry Kaufman to account for noise and volatility in the market.

It is used to time turning points, spot overall trend and filter price movements.

The kg-wave-minor indicator is an oscillator that mimics wave-like motion when defining market trends.

The color of its attached histograms changes to red or blue when price gets bearish or bullish respectively.

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