Forex Trading Strategy for Scalping Currency Pairs

The forex trading strategy which will be described below, aims to make good profit within short time and several times during the day. This particular forex trading strategy belongs to a group of strategies that trading orders takes little time and profits are relatively small.

Basically, we are doing scalping in the forex market.

The advantage with this forex trading strategy, is that produces a large number of forex signals. But at the same time there is the risk that some of these forex signals can result in loss.

Let us consider this strategy in details :

We can use this forex trading strategy in all forex pairs but the exchange rate GBPUSD has the best performance.

Timeframe

We trade only the 1-Minute chart.

The forex trading strategy contains the following indicators:

EMA(50). Exponential Moving Average of fifty (50) periods. Apply to close.
EMA(21). Exponential Moving Average of twenty one (21) periods. Apply to close.
EMA(10). Exponential Moving Average of ten (10) periods. Apply to close.
MACD(3,5,3)

Buy Rules

forex trading strategy-forex signals-forex market

According to market rules applicable in the specific forex trading strategy should open a buy (Long) order when:

1. EMA (10) has crossed above the EMA (21) and EMA (21) has crossed above EMA (50).

2. MACD line has falls below ‘0.0’ and then return above the ‘0.0’ level.

When all the above conditions are met, we open a buy order on the forex market right after the first macd bar which will close above the ‘0.0’ level.

Stop Loss

Put the stop loss level little lower than the most recent low point.

Take Profit

We can follow the price action using a trailing stop, or to use a combination of risk – reward (1:1, 2:1, 3:1).

Sell Rules

Exactly the opposite from buy rules.

Important : All investors should know that any forex trading strategy before implementing in a real account needs to be tested in a demo account in order to be fully understood.

Also, all traders should be aware that extraordinary events occurring in the forex market very often, and is likely to alter the financial results of a forex trading strategy.