Scalping in 1H timeframe provides few significant advantages over scalping in lower timeframes. One of them, is ability to accurately identify the trend. This scalping forex strategy, is all about trend identification and taking advantage of inherent forex market volatility.
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System was tested on 1H EURUSD market data from 2003 to 2018.
Trend is defined in 1H chart using Exponential moving averages (EMA tandem). Price is averaged and profit target is adjusted proportionally to the number of trades opened. Despite averaging system remains relatively conservative. It opens only up to 10 trades at the same time, always on better price.
All trades must be closed on trend reversal. Ema signaled reversals are not too frequent, therefore testing of strategy can be done accurately and can be easily tracked on the chart.
Strategy requires constant action and should be therefore done with help of expert advisor. Alpha proportion is MT4 Expert advisor able to trade this forex strategy and it was also used in testing (all screenshots).
Used tools and indicators
Timeframe: 1H (1 hour chart)
Currency pair: EUR USD (with adjustments it can work on any currency pair).
Exponential moving averages (EMA 200,50) Position of fast EM relative to slow EMA will determine trend direction. Trade only in the direction of trend.
Averaging: If trade exists new trade should only be opened on better price than previous trade. Distance between consecutive trades is 50 points.
Max number of trades: 10
Target profit: We close all existing trades at once, when account reaches profit of 0,5 USD (per 0.01 of lot size) * number of opened trades.
One opened trade: target 0,5 USD.
Ten opened trades: target 5 USD.
Max loss: not applicable, close all existing trades on EMA reversal. Ideally avoid this situation by avoiding trend exhaustion and strong S/R levels.
Forex strategy rules
SELL
EMA fast closing below EMA slow. Downtrend.
Open sell trade.
If trade exists, next trade should be opened only in averaging distance above previous trade (better price).
Target profit: 0,5 USD per 0.01 of lot size* number of sell trades.
Max loss: Close all trades on EMA crossover.
BUY
EMA fast closing above EMA slow. Uptrend.
Open buy trade.
If trade exists, next trade should be opened only in averaging distance bellow previous trade (better price).
Target profit: 0,5 USD per 0.01 of lot size* number of buy trades.
Max loss: Close all trades on EMA crossover.
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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.
