Five Minute Intraday Forex Scalping Strategy

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5 minute Intraday

This system works on 5 minute candle chart and the pairs that you can use on this system are EURUSD, GBPUSD, USDJPY, EURJPY.

Indicators are listed below:1.

  • EMA = 10 & 21
  • SMA = 50
  • SMA angle window:
  • SMA angle indicator;
    – EMA based on first indicator data overlaying this indicator.

Set up:

  • 0.1 & -0.1 on EURUSD, GBPUSD and USDJPY
    0.15 & -0.15 on USDJPY
    0.4 & -0.4 on all pairs

ADX window set up:

  • Set it at 13
  • Overlay with lsma 3 indicator.

TRADE CRITERIA:

1.) 50 SMA angle must be more than 20 degree.

  • Subjective measurement, not accurate.
  • Used in the beginning of the thread and changed late to 21 MA on the SMA angle indicator as a guide.
  •  Applicable to this system because the angle of the 50 MA is the main principle of the system.

2.) 21 EMA on SMA angle indicator must cross the 0.1 or -0.1/0.15 or 0.15 line.

  • The area between the 0.01 and -0.1 is called the no-trade zone.
  • If 21 MA is in the no trade zone, no position must be opened.

3.) The price must pull back through 10 EMA to 21 EMA.

  • Fire or war zone is the name

4.) The price should stay on the correct side of the small resistance or support.

  • Last high or low before the cross of the 51MA.
  • Nest high or low to form a small resistance/support.

5.) SMA angle indicator must be higher or lower than 0.2 & -0.2 (but support and resistance is more accurate.)

THE TRADE SET-UP:

Rule 1: Small trend line rule:

  • Make sure that the price and candles stay on the correct side of the small trend line.
  • If breakout occurs, cancel the set ups or possible trades.

Rule 2: Specific manner of pullback of candles towards war zone:

  • No steep pullbacks, just smooth and flat pullbacks of the candles.
  • There must be no sharp V shape change of direction. It must be smooth rounding of top or bottom. (Wavelike pullbacks).
  • * Ascending of descending triangle being formed between resistance or support level and small trend drawn.

Rule 3: Pullback into war zone:

  • Identify the first candle to enter the war zone towards 21MA.
  • Wait for second/more candle to pull back from 21MA towards 10MA.
  • Enter the trade on the pullback a few pips away from the 21MA.

Rule 4: Additional ADX rule (not yet fully tested):

  • For a long trade, the positive line (Blue) must be above the negative line (Red) with Isma line crossed the red line to go in between Blue and red line
  • For a short trade, the negative line (Red) must be above the positive line (Blue) with Isma line crossed the blue line to go in between Blue and red line.
  • The trend line must be above 25 level
  • If the ratio between the positive and negative line is almost 2:1, expect the pullback only up to the 10MA and enter the trade.

THE TRADE:

  • Use a market order to enter within the war zone.
  • Put Stop Loss 6+spread pips away
  • Move stop loss to breakeven after a clean 6 pips gain/profit (brokerage/spread included
  • No Trailing Stop Loss
  • Put profit limit on 10-15 pips

There are a lot of changes during the trade;

  • Don’t try to trade every signal that might work
  • Wait for the good setup to occur
  • Wait for the High probability ones
  • Rather miss an opportunity than to get involve in a bad/wrong set-up

The Entry looks:

  • Small candles
  • Flat type of pull back
  • Some sort of Resistance (uptrend) and Support (down trend) to form a small
  • acsending or decending triangle awaiting a breakout within the war zone.

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