FX Strategies To Profit From

Intraday trading forex strategy for 5-minute chart:

Recommend trade for this strategy on currency pairs EURUSD and GBPUSD,

but make no more than 3 commercial transactions per day.

I recommend selecting a Broker Forex with Terminal MetaTrader 4

And so, in a 5-minute price chart:

1) Indicator 50 Simple Moving Average (SMA 50)

2) Indicator 21 Exponential Moving Average (EMA 21)

3) the 10 Exponential Moving Average (EMA 10)

The entrance to the market:

Open trading position as soon as the angle of SMA with a period of 50 exceeds

20 degrees (see graph number 1), and the price comes back - the area between

the EMA with a period of 21 and EMA with a period of 10.

By Example - Figure 1, we open the deal to sell the slope of the 50 SMA. Set SL

(6 pips spread) and TP (8-10 pips). When on your trade position will have 6

pips, immediately transfer the SL to breakeven (for this is simply not replace

the trailing stop on a trip).

Chart 1

Just a few examples:

Chart 2

Chart 3

Addition to this forex strategy:

The most important thing in this forex strategy - is to find a strong trend for 5-

minute price chart using the slope of the 50 SMA and enter the market only

after the price rollback in the area of 2 remaining Moving Averages (EMA).

Important:

Do not follow the trade on the forex strategy, before leaving the

important news, this strategy forex absolutely not intended for trading on

the news!

You should never rush to open a bargain, wait until the entry will

correspond absolutely to all the above rules! Better to choose a Forex Brokerage company with a minimum

acceptable offset from the current price of 2-3 points.

Chart 4

Will describe the rules again:

1) 50 SMA should indicate a strong trend in the market, which is evaluated by its

slope (must be at least 20 degrees).

2) Wait until the price on the chart rollback in the area between the EMA (21) and

EMA (10).

3) Only after these 2 listed conditions are opening a bargain.

4) Set stoploss at 6 pips spread.

5) Move the stop-loss point zero “after a profit of at least 6 pips.

6) expose Teyk-profit - 8-10 pips.

You can also download the following helper indicators for this forex strategy

- for MT4:

Forex Indicator PhilNelSignals - zvukovay gives the signal, and notes on

the chart for the opening point of the transaction. Green label - buy, red

label - for sale.

Forex Indicator SMAAngle - shows on the schedule angle SMA. For this

Forex strategy should establish levels of 0.2 and -0.2.

FX10 [5 minute or 15 minute chart] Day Trading Method

This system was created by Erol Bortucene, President of Forex Research

Corporation. It is a trend following system. It can be applied on the five and

fifteen minute charts.

5 minute Chart Set-up

Indicators:

10 period WMA (Weighted Moving Average)

20 period SMA (Simple Moving Average)

Slow Stochastic (10,6,6 (exponential)) RSI (28)

MACD (24/52/18 (exponential))

Entry Rules: Only take trades between 8AM-12PM EST and/or 2AM-4AM EST.

BUY when the 10 WMA crosses up past the 20 SMA and the Stochastic is

signaling up (fast line above the slow line), RSI > 50 and the MACD histogram

>0 and MACD averages crossed up.

SELL when the 10 WMA crosses down past the 20 SMA and the Stochastic is

signaling down (fast line below slow line), RSI<50 and the MACD histogram <0

and MACD averages cross downwards.

Exit Rules

Take profits at or near key levels such as support or resistance (including the

psychological levels that end in 00, 20, 50, 80 e.g. EUR/USD 1.3380).

Application of stop loss is at the trader’s discretion.

Examples:

EUR/USD Buy signal:

EURUSD Buy Signal

GBP/USD Sell signal:

GBPUSD sell signal

Forex Spike Reversal Strategy

Steep, fast rallies in currency prices, better known as spikes are often caused by

major economic news releases such as the non farm payrolls report (NFP). The

vast majority of traders lose a lot of money trading spikes in Forex. Therefore, I

reveal my favorite forex reversal strategy on how to make regular profits from

spikes utilizing bullish and bearish pin bars. This strategy works best on 5 min

charts and provides good risk-to-reward ratio's.

Trading Setup

Time Frame: 5 min chart

Currency Pairs: Majors (EUR/USD, GBP/USD, USD/JPY, USD/CHF,

AUD/USD, USD/CAD and NZD/USD)

Trading Sessions: all

Bullish/Bearish Pin Bars: Learn more about pin bars

Rules For Sell Trades

1) Wait for a significant upward spike to occur in any of the major currency pairs.

The spike must be clearly visible on the 5 min chart.

2) The appearance of a bearish pin bar in the vicinity of the spike high price

triggers a sell order.

3) Open a short position at market on the close of the bearish pin bar.

4) Our stop is placed at the high of the pin bar.

5) Our target is the low of the upward spike candlestick.

Pin Bar Forex Scalpers Strategy

Pin bars occurring at strong support and resistance levels generally produce

reliable reversal trading signals for currency traders. Here's my step by step

version of how i use them to trade market reversals. The pin bar forex scalpers

strategy can be applied on higher timeframe's as well.

Forex Chart Setup:

• Preferred currency pairs: All

• Trading Indicators: Support/Resistance (Indicator inputs: set precision to 1)

• Preferred Sessions: Euro and Us Session

• Timeframe: 5 Min

Pin bars Defined

The picture below shows a bearish and a bullish pin bar. A bearish pin bar is

composed of a long upper wick, small body and small lower wick. Sellers control

the market price at the bar's close. In this case, we are looking to sell the currency

pair in the vicinity of a significant resistance level with a stop loss set above the

high price of the pin bar.

A bullish pin bar is composed of a long lower wick, small body and small upper

wick. Buyers now control the market price at the bar's close. In this case, we are

looking to buy the currency pair in the vicinity of a significant support level with

a stop loss set below the low price of the pin bar.

Pin bar Forex Scalper Euro/Dollar Example

Forex pin bar strategy explained :

SELL TRADE (see example above)

• Wait for the currency price to trade at or near important resistance levels.

• Open short trade if a bearish pin bar appears on the chart.

• Put a stop loss 1 pip beyond the high of the pin bar.

• Take profit target T1= 25 pips / Take profit target T2= 40 pips.

TIP: You could close half of your trading position at T1 and keep the remaining

half to target T2.

BUY TRADE

• Wait for the currency price to trade at or near important support levels.

• Open long trade if a bullish pin bar appears on the chart.

• Put a stop loss 1 pip beyond the low of the pin bar.

• Take profit target T1= 25 pips / Take profit target T2= 40 pips.

TIP: You could close half of your trading position at T1 and keep the remaining

half to target T2.

Example - Forex Spike Reversal Strategy, GBP/USD 5 Min Chart

In the GBP/USD 5 min chart above, a 50 pip spike occurs in the market. Four

candlesticks later at 13:00 on October 26, a bearish pin bar appears on the chart

and we enter short on the close of the pin bar at 1.5882. Our stop loss is placed at

the high of the bearish pin bar at 1.5894. Our target is the low of the upward spike

candlestick at 1.5849. The trade was closed 75 minutes later, banking 33 pips of

profit.

Rules For Buy Trades

1) Wait for a significant downward spike to occur in any of the major currency

pairs. The spike must be clearly visible on the 5 min chart.

2) The appearance of a bullish pin bar in the vicinity of the spike low price

triggers a buy order in the market.

3) Open a long position at market on the close of the bullish pin bar.

4) Our stop is placed at the low of the pin bar.

5) Our target is the high price of the downward spike candlestick.

Bollinger Band Rollercoaster Forex Trading Strategy

The Bollinger Band Rollercoaster strategy was developed to trade counter-trend

at or near the upper and lower Bollinger Bands. We typically look for short

entries at the upper band while looking for long entries at the lower band. A pin

bar candlestick will be used to confirm and trigger our long & short trades in the

market. This strategy works best on 30 min charts and above.

Trading Setup

Preferred Time Frame's: 30 min chart and above

Currency Pairs: any of your choice

Trading Sessions: all

Trading Indicators: Bollinger Bands set to standard period 20 Deviations 2

Candlestick Pattern: Pin Bars >> Pin bars defined

Trading Rules For Buy Trades

1) Look for the pair to be trading in the vicinity of the lower Bollinger Band.

2) The appearance of a bullish pin bar will confirm a buy trade near the lower

Bollinger Band.

3) Open two buy orders at the pin bar's close.

4) Stops are placed 1 pip behind the low of the pin bar.

5 ) Sell half of the long position at risk-to-reward 1:1

6 ) Move stop loss on the remaining half to BE

7) Sell the remaining half at risk-to-reward 1:2.

Bollinger Band Rollercoaster Forex Strategy

In the the chart above, we have two valid entry signals both confirmed and

triggered by the pin bar. The first trade is a buy trade at 1.3895 with stop loss set

1 pip behind the bullish pin bar low at 1.3862. Our first target is set at risk-to-

reward 1:1, or 33 pips + spread. The second target is set at risk-to-reward 1:2, or

66 pips + spread. Both targets were reached for 99 pips.

The second trade is a sell trade at 1.4034 with stop loss set 1 pip behind the

bearish pin bar high at 1.4057. Our first target is set at risk-to-reward 1:1, or 23

pips + spread. The second target is set at risk-to-reward 1:2, or 46 pips + spread.

Our first target was reached for 24 pips. The second target was never reached and

stopped us out at break even.

Trading Rules For Sell Trades

1) Look for the pair to be trading in the vicinity of the upper Bollinger Band.

2) The appearance of a bearish pin bar will confirm a sell trade near the upper

Bollinger Band.

3) Open two sell orders at the pin bar's close.

4) Stops are placed 1 pip behind the high of the pin bar.

5 ) Sell half of the short position at risk-to-reward 1:1

6 ) Move stop loss on the remaining half to BE

7) Sell the remaining half at risk-to-reward 1:2.

Momentum Trading Using the 5 Minute Charts

Momentum trading is a style of trading that's popular with all kinds of traders

because it is so effective in so many different time frames. It is based on the fact

that once a price starts moving strongly in one direction (often after a quiet period

of consolidation) it will carry on moving in that direction, at least in the short-

term. So the trick is to jump on board when the price starts moving and get off

again when the move runs out of momentum.

So how do you identify these momentum trades?

Well I like to trade the major currency pairs using momentum trades on the 5

minute candlestick charts, particularly at the start of the London trading session

between 8.00 and 9.00 (UK time) and also at the start of the US session.

What you do is wait for at least 3 consecutive candles on the 5 minute charts

where the body of the candle is very small. Each of these candles represents

indecision in the markets because the price keeps closing close to it's opening

price. Therefore when a breakout comes it often has a strong momentum behind it

so what you are looking for is a succession of small-bodied candles followed by a

larger breakout candle.

Then you simply enter a long or short trade (depending on the direction of the

breakout) as soon as the breakout candle closes. Your target price should be at

least equivalent to the body of the breakout candle, so if the body of the breakout

candle is 20 points you will be looking to exit for a 20 point profit or more. (A

better strategy would be to close half at 20 and let the other half run). Your stop

loss should be 20 points as well in this case, but most of the time this will not be

triggered.

To demonstrate let me show you a snapshot of today's EUR/USD price action:

As you can see if you had entered a position at the close of each of these breakout

bars represented by the arrows each one would have resulted in a profit. Of course

it doesn't always work out as profitable as this but it is still quite a profitable

momentum trading method, particularly on the more volatile days.

If you would like more forex tips and strategies, including full details of my main

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Forex 5 Minute Scalping Strategy

There is a way to make a quick --but small-- buck in the forex market (foreign currency exchange). Not a home run, but just a few fast pips in a very reliable way.

This is a quick scalping strategy I have used many times. Use the 5-minute forex

candle charts, and look for 3 long candles in one direction. 75% of the time, the

4th

candle will continue in the same direction, usually for at least half the distance

the previous candle has run.

I usually set a TP (Take profit) limit for 10 pips and a Stop loss at 15 pips. I

realize I am risking 15 to make 10, but with a 75% success rate, it works out well.

For example, if the GBP/USD falls in 3 consecutive candles, 10, 18, and 20 pips,

then likely the 4th

pip will continue down at least 10 pips. This works best when

the candles get longer each time. You have to move fast and set the trade as soon

as the 4th

candle starts, or even on the end of the 3rd

(if it's obvious where it is

going).

After you've set your TP and SL levels, just sit back and see what happens. Don't

touch it. You'll be out of the trade in just a few minutes, with either a small loss or

a small gain. Most of the time, you'll see a 10 pip gain ($100, not bad for a few

minutes - or $10 in a mini forex account).

Another example: after EUR/USD shoots up 3 straight candles in a row, 8, 12,

18.... chances are that the next candle will be at least 9 pip in the upward

direction. Buy long and set a take profit limit for 9 pips higher. There's an 80%

chance you will have $90 profit within 5 minutes (or $9 in a mini forex account).

We call this Momentum Scalping. We are banking on a continued move in one

direction for just one more candle length.

Do not try this strategy near a news event. If an economic number is planned for

release at 8:30 a.m., then only use this before 8:00 a.m. or after 9:00 a.m. Wait for

the dust to settle from any news related jumps or choppiness.

The best currency pairs for this type of scalping are: GBP/USD, GBP/JPY,

EUR/USD, EUR/JPY, USD/CHF and USD/CAD as these are the most volatile

and the most liquid pairs.

Do not try this on the slower currency pairs, or the exotic currencies.

Test the strategy first by just watching the forex charts and paper trading. Get a

good feel for it, so you can trigger your trades quickly and nimbly.

There isn't much time for hesitation, so get good at it before you place large

trades in your forex account. Try it in a mini or micro account first. Picking up 10

pips a day can lead to some good profits... they do add up.

Trend Line Forex Scalper Strategy

Trend Line Forex Scalper provides an easy, yet effective way to scalp the forex

on 1 min forex charts. The strategy is composed of the Stochastic oscillator and

rising or falling trend lines.

Chart Setup:

• Preferred currency pair to trade: Major Currency Pairs

• Trading Indicators: Stochastic Oscillator (default settings: 5,3,3)

• Time to Trade : Euro and Us Session

• Timeframe: 1 Min

Trend Line Forex Scalper Example

How it works :

BUY TRADE

• Draw a significant rising trend line in a up trending market.

• The currency pair retreats towards the rising trend line but doesn't close below.

• Open a buy trade if the Stochastic oscillator turns back above 20 from oversold

readings below 20 (gray circle on the chart above).

• Place your stop loss 1 pip below the rising trend line.

• Price objective 20 pips or better.

SELL TRADE

• Draw a significant falling trend line in a down trending market.

• The currency pair retreats towards the falling trend line but doesn't close above.

• Open a sell trade if the Stochastic oscillator turns back below 80 from

overbought readings above 80.

• Place your stop loss 1 pip above the falling trend line.

• Price objective 20 pips or better.

Forex Price Action Trading Strategy

Swing Highs and Lows

The first thing that we need to recognise is what is a Swing High and Swing Low.

This is probably the easiest part of price action and bar counting although the

whole process gets easier with practice.

I define a swing high as;

A three bar combination

A bar preceded and succeeded by

lower highs

I define a swing low as;

A three bar combination

A bar preceded and succeeded by

higher lows

Market Phases

There are only three ways the market can go;

Up Down Sideways

With the swing high/low definition now in mind we can start to build some layers

on to the chart to identify these market phases and start to do a simple count of

these swing highs and lows.

In short

The market is going up when price is making higher highs and higher lows The market is going down when price is making lower highs and lower lows The market is going sideways when price is not making higher highs and higher

lows OR lower highs lower lows

This may sound like child's play and a statement of the obvious but you will be

surprised at how often people will forget these simple facts. One of the biggest

questions I get asked is, which way is the market going? By doing a simple

exercise you can see which way that price is going and decide on your trading

plan and more importantly timing of a trade.

What do I mean by timing? It may be that you are looking for a shorting

opportunity as the overall trend is down but price on your entry time frame is still

going up (making HH's & HL's). There is, at this stage, no point in trying to short

a rising market until price action start to point down (making LH's & LL's. More

on this shortly).

A Short or Bearish Bias Changeoccurs when the following

sequence develops.

HH>HL>LH>LL>LH The bias change is confirmed when

price moves below the las lower low made as highlighted on

the chart.

Another way of saying this is 123 reversal and you are trading

the pullback as your entry trigger (Red Line).

There are a few variations of this pattern but this is quite

simply a price action bias change in its simplest form.

A Long or Bullish Bias Change occurs when the following

sequence develops.

LL>LH>HL>HH>HL The bias change is confirmed when

price moves above the last higher high made as highlighted

on the chart.

Another way of saying this is 123 reversal and you are trading

the pullback as your entry trigger (Blue Line).

There are a few variations of this pattern but this is quite

simply a price action bias change in its simplest form.

Trending Price Action

After a bias change has been seen and confirmed, one of the phases that the

market can then take is to start trending either up or down depending on the bias

change previously.

In the chart below we can see what price ideally looks like when price is trending

up and trending down. Each phase shows price making HH's & HL's on its way

up and LH's & LL's on its way down.

Ranging Price action

Now this is where the chart can become interesting. By using the price action

counting of the swing highs and lows we can know at a very early stage IFprice is

going to start to develop range bound activity.

Price is not making new highs OR new lows

I don't mean all time highs/lows or new day/week/month highs/lows... just simply

a new chart swing high or low. Price will start to stall and not make a new swing

high/low and typically will stay contained within the last swing high and low that

was made on the chart. Isn't that a simple definition?

Range rule definitions

Price doesn't make a new high or low on the move

If price stays contained within the last swing high and swing low to be made, price will remain range bound until it makes news move highs or lows.

Price confirms the range when a lower high and a higher low is made within the previous swing high and low.

In the chart below you can see that from the left side of the chart price is making

LH's & LL's all the way to the first blue arrow which in real time would be the

latest lowest low. Price then moves higher to make a HH. These two swing levels

have been highlighted.

At the point of the chart, in real time, price needs to either start moving higher

past the last swing high (red Arrow) making a new high OR move lower past the

last swing low (blue arrow) making a new low. Until either of those things

happens price will most likely remain range bound. In this example that is what

happened.

Range considerations

Some considerations for identifying ranges at an early stage in real time are;

That price could be creating a pullback or bias change and as the chart unfolds for you a new high or low could be made voiding the potential range.

There are several definitions of a range one of the more common ones is that you are looking for a double touch of support and resistance. For me this is a little too late in the game as price may not create the double touch as in the example above. With this price action method you can identify the possibility of a range developing VERY early without having to worry IF price does or does not give you the double touch. As you can see with that definition you would interpret that price is not range bound at all but, you can clearly see visually that price is moving sideways without any definition.

What you should have learnt from this short article

o A simple rule defined method to identify swing highs and lows o How to use this swing high/low definition to interpret price action

market phases o How to identify a bias change o How to identify trending price action o How to identify Range bound price action

Bias Change pattern variation

In the below images we can see the pattern variation and compare them to

the outlined pattern above. The only main difference is that you are

looking for a breach of a previous swing high or low as the first qualifier

to indicate a potential bias change.

Acronyms used

HH - Higher High HL - Higher Low LH - Lower High LL - Lower Low

By Philip Newton

www.trading-strategies.info

Philip Newton is a professional trader and teaches new and experienced traders

the skills needed to trade for a living. His live chat room is amongst the best in

the industry. Inside the members area traders can watch videos of his trades and

receive support for any question they may have. The live trading room is the heart

of the website where the real learning begins. www.trading-strategies.info

Inside Bar Trading Strategy

Inside Bar Forex trading strategy — a popular system with a nice win/loss ratio

but a rather rare occurrence of the proper entry conditions. It doesn't require any

indicators and can be applied on the bare candlestick or bar chart.

Features

Entry conditions are clearly defined. Very simple bare chart system. High success rate. Rare occurrence of the proper conditions.

How to Trade?

1. An inside bar is a bar or a candlestick that completely fits into the first preceding bar (also called a "container" bar), including its High and Low values.

2. If the current bar has an index of 0 and the previous bar has an index of 1 then the following conditions should be true for the current bar to count as an inside bar: High[0] < High[1] and Low[0] > Low[1]. Mind the strict "greater" and "less" operators.

3. Bearish inside bar that follows a bullish "container" bar on the clearly visible uptrend signals a Short position.

4. Bullish inside bar that follows a bearish "container" bar on the clearly visible downtrend signals a Long position.

5. Stop-loss is set to the Low of the "container" bar for the Long positions and to the High of the "container" bar for the Short positions.

6. Take-profit should be set to the nearest support/resistance level formed by the trend.

Example

A bullish inside bar after a downtrend is shown on the example chart. The inside

bar is easy to identify and the stop-loss level is rather conservative here. The

target was set to the resistance level formed by the previous downtrend. As you

can see, the currency pair rate reached the take-profit level without any problems.

Simple Price Based Trading System

Simple Price Based Forex trading system — an interesting system that was

developed by one of the Forex traders recently. It works for any pair (though,

EUR/USD is recommended) and in all market conditions. No indicators are

required to trade using this system. All you need is the ability to set up the

pending orders.

Features

Position-based trading for any state of the market. Trailing stop protects profit. Lack of statistical proof.

How to Trade?

1. Higher timeframe chart is recommended as each trading setup requires some calculations based on the latest bar.

2. Key number should be calculated first. It's based on the current price. For the quotes with 4 digits after a dot the key value is the current price multiplied by 10 and then rounded. For the quotes with 2 digits after a dot the key value is the current price divided by 10 and the rounded.

3. Place pending Buy order at Current Price + (2 * Key value). 4. Place pending Sell order at Current Price - (2 * Key value). 5. Place stop-loss for pending Buy order at Open Price - (2 * Key value). 6. Place stop-loss for pending Sell order at Open Price + (2 * Key value). 7. Take-profit for both orders is calculated similarly to the key value but the

current price should be multiplied by 100 for the quotes with 4 digits after a dot and shouldn't be divided for the quotes with 2 digits after a dot. In both cases the values should be rounded.

8. Trailing stop is also applied to the orders and is set to 2.5 * Key value. 9. Don't forget to cancel the untriggered orders after the timeframe period ends. 10. If this sounds too complicated, see the example below.

Example

Let's calculate the entry conditions and parameters for an example presented on

the chart:

1. It's a EUR/USD H4 chart. 2. The current price is 1.4810, the current bar's open price is 1.4832. 3. There are 4 digits after a dot in the quotes for EUR/USD. That means that the

Key value is calculated as 1.4810 * 10 = 14.8. Rounding it results in 15 pips. 4. Pending Buy order level is calculated as 1.4810 + (2 * 15) = 1.4840. 5. Pending Sell order level is calculated as 1.4810 - (2 * 15) = 1.4780. 6. Stop-loss for pending Buy order is calculated as 1.4832 - (2 * 15) = 1.4802. 7. Stop-loss for pending Sell order is calculated as 1.4832 + (2 * 15) = 1.4862. 8. Take-profit for all pending orders is calculated as 1.4810 * 100 = 148.1 or, after

rounding, 148 pips. 9. Take-profit for pending Buy order is set to 1.4840 + 148 = 1.4988. 10. Take-profit for pending Sell order is set to 1.4780 - 148 = 1.4632. 11. Trailing stop for both orders is set to 2.5 * 15 = 37.5 or, after rounding, 38 pips.

Credits

This trading system was originally developed by The Forexkid. The version

presented here has some minor modifications.

Martingale Trading System

Martingale trading system — is based on the popular betting (gambling) system

of the 18th century France. The main principle of this system is to double the bet

each time you lose so that if you win (considering a 100% bet win/loss each time)

you recover a previous loss and will also gain the first bet amount. If one had an

infinite amount of money, this strategy would be a sure-fire thing as with the

infinite amount of bets the necessary result will with probability 1 eventually

come. The problem is that no trader possesses an infinite wealth and thus utilizing

this strategy eventually leads to a wiped account. Although it's a very popular

Forex trading system and is used in many paid Forex expert advisors, I strongly

don't recommend trading with it.

Features

Theoretically bullet-proof system. Practically unsound. Reward/risk ratio can reach extremely low values.

How to Trade?

1. Any currency pair and timeframe will work. 2. Determine your basic position size. 3. Place an order in a random direction (Buy or Sell) with some fixed stop-loss and

the same take-profit. 4. After the SL or TP is triggered you either win or lose. 5. If you win, set the position size to the initial and go the step 3. 6. If you lose, double the position size and go to step 3. 7. If you have infinite trading account balance, eventually you'll win a lot. If your

account balance is limited you'll lose it eventually.

Example

No example chart is present for this trading system as there is nothing important

to be shown on the chart. Let's view the following example.

1. You start with $10,000 account and can trade with mini Forex lots (0.1 of the standard lot) and decide to trade on EUR/USD.

2. You define your basic position size as 0.1 lots. 3. You decide to go Long setting stop-loss at 40 pips (or $4). The take-profit is set

to the same value. 4. You lose the position. Now your account balance is $9,996.

5. You double your next position size to 0.2 lots, so that using the same stop-loss and take-profit levels you risk $8 and also have a chance to win $8. You decide to change the position's direction and go Short.

6. You win and now you've recovered lost $4 and also won $4. Your account balance is $10,004.

7. You return your position to initial 0.1 lots and start over. 8. With $10,000 account balance and $4 basic risk value you'll have to lose 11

positions in a row to wipe your account. You'll have to win 250 positions to double your balance.

Scalping Forex Strategy

Scalping Forex strategy — is a simple trading system that relies on very close

targets, extremely low stop-loss and a lot of positions opened and closed during a

short period of time. Not all Forex brokers allow scalping and not all that allow

are good to scalp with. Scalping may not be suitable for all traders and,

personally, I don't recommend scalping to anyone. The most simple scalping

Forex trading system is presented here.

Features

Nice profits for lucky (intuitive) traders. No need to pay attention to technical, fundamental or any other analysis. Spreads eat a big part of profit. Reward/risk ratio is usually too low. Not all Forex brokers allow scalping. Requires a lot of time for trading and monitoring.

How to Trade?

1. Currency pairs with a lot of intraday volatility but low spreads are recommended (EUR/JPY, GBP/USD, EUR/USD and USD/JPY are good examples).

2. M1 timeframe or lower is optimal. 3. Optimal trading time is during the European/U.S. and U.S./Asian trading

sessions' intersection. 4. Prepare to enter the positions by closely monitoring the market activity for 5–

15 minutes. 5. When you think that you "caught" the current short-term trend, enter a

position. 6. Set stop-loss to about 10 pips. 7. The general rule for target profit is one or one-and-a-half spreads. Setting take-

profit to such low levels (2–5 pips) is almost impossible, so you'll need to monitor the position to see the target profit and close it manually.

Example

No example chart is present for this trading system as there is nothing important

to be shown on the chart. Let's view the following examples.

1. You open Long position on EUR/USD with 10 pips stop-loss and target for 4 pips of profit. After 20 second the position reaches 4 pips of profit and you close it.

2. You open Short position on GBP/USD with 10 pips stop-loss and target for 4 pips of profit. After 3–4 minutes the trend unexpectedly reverses and the position is closed by stop-loss.

3. You open Short position on USD/JPY with 10 pips stop-loss and target for 3 pips of profit. After about 1 minute the position reaches 4 pips of profit and you close it.

4. You open Long position on EUR/JPY with 10 pips stop-loss and target for 5 pips of profit. After 5 seconds the price spikes and the position reaches 12 pips of profit and you close it.

5. That's 10 pips of profit in less than 6 minutes. Of course, it's purely hypothetical.

Support and Resistance Trading

Strategy

Support and Resistance Forex trading strategy — is a widely used trading

system based on the horizontal levels of support and resistance. These levels are

formed by the candlesticks' highs and lows. A break-through of these levels after

a period of consolidation gives a signal for a trend. This strategy doesn't require

any chart indicators except for the ability to draw lines (at least imaginary).

Features

Well-defined low stop-loss. Relatively high success rate. Unclear target levels.

How to Trade?

1. Support level is formed by the lows of two or more candlestick bars that form a rather straight horizontal line with no lower lows between them.

2. Resistance level is formed by the highs of two or more candlestick bars that form a rather straight horizontal line with no higher highs between them.

3. Consolidation is a period without any trend, forming near support or resistance level, with the relatively small candlestick bodies.

4. A close below the support level signals a short position.

5. A close above the resistance level signals a long position. 6. Stop-loss is set to the low of the previous candlestick (for the long positions) or

to the high of the previous candlestick (for the short positions). 7. Take-profit can be set relatively to the stop-loss or as a trailing stop of some

sort.

Example

Support set-up:

Resistance set-up:

A period of consolidation is clearly seen on both example charts. In both cases the

support/resistance level is formed by two candles on a rather short period. Stop-

loss is placed close to the entry level. Take-profit couldn't be clearly set at the

position entry moment, but a risk/reward ratio of not less than 1:2 could be used

easily. If you are having trouble detecting support and resistance levels on the

chart you can use our free MT4/MT5 indicators for that: Support and Resistance

or TzPivots.

Price Action: A Short-term trading approach

Trading based on price action has become popular in these last years, mainly

because of traders acknowledging that trading based on technical indicators such

as moving averages, RSI, CCI, Stochastics and others have a lagging factor that

makes us enter late, when the move already happened. This happens because technical indicators, all of them, use the previous market action (i.e. last 21

periods or candlesticks) to calculate the final reading, and what happened in the

last n-periods has little or nothing to do with that the market will do, say, in the

next 10 periods or candlesticks. In other words, if the market went up on average

in the last 21 periods, the indicator reading will point up or give you a long signal,

but that doesn’t mean that the market will continue its way up in the next 10

periods.

In order to adopt a Forex price action approach we need to take in consideration 3

main aspects: pressure, level and significance.

1 – Pressure

There are two types of pressure: upward and downward pressure. We have

upward pressure when bulls take control over the market after bear dominance

and downward pressure when bears take control over the market over the market

after a period of bull dominance. Try to picture this “pressure” on your head,

what would it look like? It would look like a “v” shaped pattern as upward

pressure or an “inverted v” as downward pressure. Let’s take a look at some

images to make sure this is clear.

[Image 1]

The first candlestick moves down (bear dominance – red arrow), but at some

point, bulls gain confidence and take control over the market (i.e. bulls felt

comfortable trading at those levels) pushing the market back up (bull dominance

– blue arrow). If we combine both arrows, we end up with a v shaped pattern

(green arrow) with upward pressure.

Does it mean that only known candlestick patters (such as piercings, hammers,

shooting stars, etc.) have either upward or downward pressure? NO. In fact, most

patterns that have either upward or downward pressure aren’t known candlestick

patterns. Take a look at the next image.

[Image 2]

This pattern is not known in the candlestick literature, but it still has upward

pressure. You still see the “v” market movement.

Next time you see a candlestick pattern, try to picture it in your mind as “v” or

“inverted v” pattern, this way you will train your brain to see them as price action,

not just as a candlestick pattern.

Request a FREE one-on-one coaching session to learn more about pressure and

price action

2 – Level

Another important concept that describes Forex Price Action, is how the market

behaves at a place it already traded before. I suspect the reader already knows

what we are talking about, if the market was rejected from an important level, the

next time it comes close to that level, it is likely to get rejected again. And yes,

we are talking about regular support and resistance levels.

This is the reason why we always need to pay attention on where the market has

been rejected, specially the short term Support & Resistance levels, because at

those levels we always should be ready to open our trades (in the direction of the

long term market condition). Please take a look at the next chart:

[Chart 1]

In this chart, where would you open your trades? If I was to trade this chart, I

would look for long opportunities around the bottom of the range, because the

market gets rejected every time it gets near that level. And short opportunities

around the top of the range, again, because every time the market gets close to

this level the market gets rejected.

3 – Significance

Due to the nature of the Forex market (OTC: over the counter), it’s impossible to

get an exact reading of the volume of the market at any given moment. But there

are certain measures that can be used as a “proxy variable”, one of them is the

significance of the “pattern”.

The significance of the pattern refers to the size of the pattern that triggered the

upward/downward pressure compared to the previous candlesticks. If we are

tracking a “long” signal, we need to compare the size of the pattern that triggered

our long signal to the bear candlesticks that formed the previous downward

movement. And vice versa, of we are tracking a “short” signal, we need to

compare the size of the pattern that triggered our short signal to the bull

candlestick that formed the previous upward movement. Let’s take a look at some

images.

[Image 3]

The trigger signal in the image above is clearly larger than any of the 3 previous

candlesticks that formed the upward movement; therefore it is a significant

pattern.

4 – Putting it all together

Please take a look at the next chart:

[Chart 2]

The pattern (orange square) with downward pressure is formed at an important

short term resistance level (green line) and it is also significant (pattern larger

than the previous candlesticks). This is considered to be a Forex price action

signal to go short.