We know that most of you would like to have a reliable scalping system working in 5 to 15 min charts. Fortunately, most of the time, those systems are performing even better in 1H chart. Test results are also much more accurate in higher time frames. This scalping strategy was tested for profitability in 1H chart on high quality historical data since 2003.
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Strategy is suitable for aggressive scalping but also for more conservative day trading. This all depends on settings chosen by the trader, and time frame he uses. It can be used also in 5 and 15 min chart.
Used tools and indicators
Exponential moving averages (EMA 600,200) Standard EMA crossover will notify us on trend change. To capture the main trend slower calculation period is used. To distinguish between downtrend and uptrend, relative position of fast and slow EMA will be considered.
Relative strength index (RSI 21) RSI is used with central zone (buy above 70, sell below 30 lines). This help to separate trend and range.
Big candle signal (10 to 150 pips). This signal ensures high frequency trading in lower time frames. We will be looking for momentum candle closing in the direction of EMA identified trend. The candle will surpass the high/low of previous candle. It also has specific candle body range, confirming momentum.
Advanced trailing stop (extra deviation 100 pips). Stop loss has a function of trailing stop. It will act as a stop loss for scalping position and it will protect our gains if we decide to use this system for day trading and wider profit targets.
MAX open trades (5 in test): For purpose of aggressive scalping in lower time frames. We can increase the number of simultaneously opened trades per side. Use with caution as it proportionally increases the risk for the account. If you decide to use more than one trade, adjust the lot size accordingly. Consider the draw down.
Forex strategy rules
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SELL
EMA slow trending above EMA fast – downtrend. RSI trending below sell below zone – downward momentum.
We will be looking for strong bearish candle with defined body range. It must close below the low of previous candle.
We enter the trade short on signal candle close. TS is placed above the high of the signal candle (extra deviation for trail stop applied on candle high).
Take profit 30 pips.
BUY
EMA slow trending below EMA fast – uptrend. RSI trending above buy above zone – upward momentum.
We will be looking for strong bullish candle with defined body range. It must close above the high of previous candle.
We enter the trade long on signal candle close. TS is placed below the low of the signal candle (extra deviation for trail stop applied from candle low).
Take profit 30 pips.
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Disclaimer: Expert advisor was tested for profitability on historical data. All screen shots provided are displaying real results of the test. However past data will never guarantee future success. Every expert advisor needs to be tested properly on demo account. LIVE use only on your own risk. Read full disclaimer. TheForexKings Team does not give any financial advice. TheForexKings does not take any responsibility for any user’s investments and investment decisions. All rights reserved. Strictly for personal use.
