Smaller the timeframe, more unpredictable and chaotic the price becomes. There is not point to be looking for price formations below 15 min chart. However, it is still possible to consider the price action even on lower timeframes. This scalping forex strategy looks at the price action in very logical and sustainable way. This methodology can be applied on any timeframe.
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Price action scalping forex strategy looks to exploit relatively good price within the trend.
When price moves against the initial entry, system will make active effort to improve the overall entry price. This price action strategy will look to use limited averaging ( max 5 trades) to improve overall entry (that was initialised on already good price).
Scalping strategy is traded by Countertrend fighter MT4 EA .Expert advisor was also used to verify performance of the strategy on high quality historical data (1H chart), and it is able to trade it autonomously.
Used tools and indicators
Strategy works with adjustments on every time frame including 5 minutes chart. To ensue the high accuracy of historical test system was tested in 1H char. Following inputs were used for testing on 1H chart (all screenshots provided).
EMA trend filter (exponential moving averages tandem 800/200)r: Filter must confirm the trend direction. EMA fast must close above EMA slow to enter the long trade (uptrend signal). Vice versa for short trade.
Price action signal: Price must close in defined distance of 400 pips (400 Point distance for entry input in expert advisor) away from the fast EMA. Price must close above fast EMA for short entry/ or below fast EMA for long entry.
Averaging module (-50): Once first position moves to loss new position at better price must be opened according to calculation involving exponential function (full calculation here).
Increase factor: consecutive averaging positions are opened with increased lot size (increase factor 1 in expert advisor). The calculation is following: increase factor (1 in this forex strategy) number of open trades (per side) * lot size+lot size
Number of trades (5): Strategy allows opening up to 5 trades per side at the same time.
In this forex strategy we close trades according to reached profit/ loss in accounts base currency. Targets are calculated for initial lot size of 0,01 lot. Should be increased proportionally when increasing the lot size (also in expert advisor).
Forex price action scalping strategy rules
No long trade exists.
EMA fast is trending below EMA slow. This signals downtrend and we will enter only short trades.
Price candle is closing above fast EMA with defined distance( Point distance for entry) between the candle close and fast EMA.
If short trade already exists, account profit must be less than averaging module calculation criteria (full calculation on expert advisor page)
We enter short trade on candle close only.
We close all existing short trades at target profit/max loss defined in inputs (adjust those proportionally to used lot size).
No short trade exists.
EMA fast is trending above EMA slow. This signals uptrend and we will enter only long trades.
Price candle is closing belowfast EMA with defined distance (Point distance for entry) between the candle close and fast EMA.
If long trade already exists, account profit must be less than averaging module calculation criteria (full calculation on expert advisor page)
We enter long trade on candle close only.
We close all existing long trades at target profit/max loss defined in inputs (adjust those proportionally to used lot size).
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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.