This is a 5-minute scalping forex trading strategy for the EURUSD, GBPUSD, USDJPY, and EURJPY currency pairs. Scalping is a unique trading strategy that helps the trader make significant profits on minor price changes.
In this scalping strategy, the trader needs to make a minimum of 10 trades within a single day to capitalize on any minor price changes. We must implement a strict exit strategy to minimize any potential losses. In this particular scalping strategy, the holding time is 5 minutes. This method requires timed execution and nimble trading.
Indicators to Be Used
In this trading strategy, the indicators used are the 10 and 21 EMA and the 50 SMA.
It would be best to open an ADX indicator in a different window set at 13.
At least three criteria must be satisfied for this trade.
EURUSD 5-minute timeframe: Two bullish signals are shown with the circles on the forex chart. Circles one show the first buy signal, and circle 2 show the second buy signal. The minor support trendline is shown as the dot black line. The price action nicely and accurately reverses in the war zone and continues higher.
Trade Criteria to Be Satisfied for This Scalp Trading Strategy
- The first is that the 50 SMA angle must be more than 20 degrees. The measurement does not need to be accurate, a subjective estimate is sufficient.
- The second is that the price should pullback through the 10EMA to the 21 EMA. The area between the 10 EMA and the 21 EMA is the fire or war zone.
- The third criterion for this trade is that the price must stay on the good side of the small resistance or support line. You should draw a trendline from the last high or low before the cross of the 50 SMA to the next high or low. This will form a small support or resistance line.
Strategy Trade Set up Rules
- The candles and price must all stay on the right side of the minor trend line. Otherwise, it will cancel the possible trades.
- Pullbacks of candles towards the war zone must be flat and smooth.
- After identifying the first chart candle to enter the war zone, wait for the second one to pullback from 21MA towards 10MA and enter the trade on the pullback.
EURUSD 5-minute timeframe: Two bearish signals are shown with the circles on the chart. Circles one show the first sell signal, and circle 2 show the second sell signal. The minor resistance trendline is shown as the dot black line. The price action nicely and accurately reverses in the war zone and continues to the downside.
Enter The Trade
Get the trade entry in the war zone by making a forex market order and putting your stop loss six or more pips away. Do not use a trailing stop loss. The profit limit must be between 10 and 15 pips. Only trade where there is a good setup. Enter on small candles and lookout for flat pullbacks.
Read More: SCALP PRO Indicator – For FREE Download
