This is a simple system just like a lot of other free Forex strategies. For this one, we would recommend using the GBP/USD currency pair on the timeframe M5. When using this scalping strategy you should use a trustworthy Forex broker that can offer you the MT4 4 trading platform.
Description of the Simple Scalping Forex Strategy
You should adjust the chart window of your currency pair before you start to trade with this Forex strategy.
Firstly, you should place the following indicators on the chosen currency pair:
- Apply a simple moving average using a period 8 to the 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 MT4 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 long positions
- The majority of at least one 5-minute candle is above the moving average
- On both the currency pair and MACD indicator charts, the Parabolic SAR chart points should be below
- Both the moving average and the MACD indicator should be above zero
- 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
- You shouldn''t set a take profit. You close trades using a moving stop loss
- The stop loss should be moved to break even when the currency pair you are using moves 15-20 points away from the opening price. If you wish, you can use a trailing stop
- 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 If the indicator moved under the chart again, we would continue moving the stop loss after the second point
It's important to remember that free Forex strategies only become profitable if all of the rules are followed. To open up a sell trade you would need the exact opposite of these requirements.
Additional Conditions of the Simple Scalping Forex Strategy
This strategy may be unprofitable when the release of important news is expected so it would be better to refrain from trading under those circumstances.