The following is a 5-minute forex trading strategy for the EURUSD, GBPUSD, USDJPY, and EURJPY currency pairs. Scalping is a special type of trading strategy that helps the trader make a significant profit on minor price changes.
In this strategy, the trader must perform a minimum of 10 operations in a single day to capitalize on any minor changes in prices. A strict exit strategy must be implemented to minimize any potential loss. In this particular strategy, the waiting time is 5 minutes. This method requires precise execution and agile trading.
Indicators to use
In this trading strategy, the indicators that will be used are the EMA 10 and 21 and the SMA 50.
Then you need to open the ADX indicator in the different windows set to 13.
At least 3 criteria must be met for this trade.
Trade Criteria to Be Satisfied for This Trading Strategy
The first criterion is that the 50 SMA angle must be greater than 20 degrees. The measurement need not be absolutely accurate, a subjective estimate is sufficient.
The second criterion is that the price should go back through 10EMA to 21EMA. The area between 10EMA and 21EMA is the fire or war zone.
The third and final criterion for this trade is that the price should be kept on the right side of the small resistance or support line. You should draw a trend line from the last high or low before the 50SMA crossover to the next high or low. This will form a small resistance or support line.
Trading setup rules
Price and candles should be kept on the right side of the small trend line. Otherwise, possible trades will be canceled.
Pullbacks of candles towards the war zone should be smooth and flat.
After identifying the first candle to enter the war zone, wait for the second candle to retreat from 21MA to 10MA and then enter the trade on the retreat.
Enter the trade in the war zone by making a market order and putting your stop loss 6 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 configuration. Get into small candles and look for flat pullbacks.