In keeping with the majority of free Forex strategies, this system is a simple one. We would recommend using the M5 timeframe and the GBP/USD currency pair.
When using this what is forex scalping you should use a trustworthy Forex broker that can offer you the Metatrader 4 trading platform.
Description of the Simple Scalping Forex Strategy
The chart window of this currency pair should be adjusted before you start trading with this forex strategy. Firstly, you should place the following indicators on the chosen currency pair:
- Simple moving average with period 8, applied to close price (SMA (8))
- 5,8 9 using the MACD indicator
- On the price chart of GBP / USD place a Parabolic SAR (0.1, 0.11)
- Place another Parabolic SAR of 0.1, 0.11 however this time it needs to go onto the MACD chart (for this you will need to look in the Metatrader terminal and open up 'Navigator', then go into 'Indicators' to find the Parabolic SAR which you can drag and drop into the MACD chart
The bets times to use this strategy are when the London and New York stock exchanges are at their most active.
Rules for Opening Buy Trades
1. The bulk of one or more candles is over the moving average
2. On both the currency pair and MACD indicator charts, the Parabolic SAR chart points should be below
3. The MACD indicator should be situated above the zero level as well as its moving average
4. A stop loss needs to be set for this system, as with all other free Forex trading strategies. To start with, this should be set up at 20 points from the opening price
5. A take-profit should not be set You close trades using a moving stop loss
6. After the chosen currency pair has moved 15-20 points away from the opening price, you should move the stop loss to break even. If you wish, you can use a trailing stop
7. The stop loss should be shifted to immediately beyond the price on the Parabolic SAR's second point as the currency pair moves in the required direction. There are times when the stop loss won't trigger such as if the Parabolic SAR moves to the upper part of a chart. Just wait for further developments if this happens Should the indicator go below the chart once more, the stop loss will continue to be moved to beyond the second point.
A key point to keep in mind is that free Forex strategies will not be profitable unless all of the rules are strictly followed.
If you want to open a sell trade, the requirements are exactly the opposite.
Additional Conditions of the Simple Scalping Forex Strategy
This forex pip may be unprofitable when the release of important news is expected so it would be better to refrain from trading under those circumstances.
|Another Simple Scalping Forex Strategy page created by Maynard Ortolf|