Scalping forex strategy with strong base. In this trading system, we will rely on the fundamentals. Namely, proper trend identification and fidning price good enough for entry. There is no reason to overcomplicate things, when you have simple edge in the market. That edge can be also transferred to any currency pair and (almost) all time frames.
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System used two EMA pair to identify existing market trend and confirm its confluence with long term market direction. Once we finish this task, we start to look for suitable entry point. In the wave structure of the market, good entry often comes disguised as the top/bottom of the wave (break of the wave).
We will identify those good entry points using simple BB tunnel, that can be used by professionals and beginners alike.
System was tested for profitability on EURUSD tick data since 2003 with very nice results. Expert created by theforexkings and used for testing and trading according to any settings. Use it to adapt and test the system at your will.
Used tools and indicators
Exponential moving averages (EMA 500,250 and EMA2 200,100). Two independent tandems of EMA must unanimously confirm either down, or up trend. All positions must follow the trend.
Bollinger bands (BB period 40, deviation 1) Standard bb tunnel is used to identify relatively high/low price for entry. We will be looking for price to briefly penetrate the outer lines of the tunnel only to clock back within it. This will be considered a breaking wave.
Advanced trailing stop (extra deviation 150. Pips) Based on BB that got penetrated. Extra distance is applied. Considering the fact that we will use tight take profit, TS acts more like a standard stop loss. However, it is extremely useful when we decide to use the system with this amazing entry as a day trading strategy.
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Forex strategy rules
In both EMA pairs, faster EMA is trending below its slower counterpart. This will confirm downtrend and enable short entry.
The signal comes with the price moving above the upper BB line. We will be waiting for it to close back within the tunnel. Once it closes, we enter the trade short.
Trailing stop is place according to upper BB line and extra deviation is applied.
Take profit: 30 pips
In both EMA pairs, faster EMA is trending above its slower counterpart. This will confirm uptrend and enable long entry.
The signal comes with the price moving below the bottom BB line. We will be waiting for it to close back within the tunnel. Once it closes, we enter the trade long.
Trailing stop is place according to bottom BB line and extra deviation is applied.
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.