To be a successful forex trader you need to find out what works for you in the forex market. From my experience not all forex strategies suit all trading style. For instance, a day trader aim is to stay longer in the market while a scalper is only interested in taking advantage of small price change in the market to make profit multiple time in a trading day, so some strategies that work for day trading may not work for short term scalping. In this article, we are going to look at 5 minutes Forex scalping strategy that can boost your probability of picking winning trades in the forex market.
The 5 Minutes Forex Scalping Strategy
Before looking at the strategy let’s define some terminologies and provide the framework that will guide you when using this strategy
What is Scalping?
Scalping is the act of taking advantage of a small price change in the forex market. Scalpers move in and out of the market frequently within a trading day to make profit from small price change in the market.
How Does Scalping work?
Smaller moves happen very frequently in the market, it’s this smaller moves that gives rise to the big move. Since scalpers trade with the lower timeframe so their goal is to take advantage of this moves as often as possible. Thus, the idea behind scalping is that a trader can easily grab small profit as many times as they can throughout a trading day.
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What do Scalpers do?
One of the skills you need as a scalper is concentration. As a scalper, you need to stay focus on the chart, monitor the pattern and be ready to jump in and out based on your laid down rules once your setup is confirmed.
Basically, the task of a scalper include:
- Monitoring chart for setup
- Placing and exiting trades once setup is confirmed
- And repeating the process till his/her daily profit target is met.
How to be a Successful Forex scalper
The goal of every trader is to make consistent profitable trades daily. As a scalper, your task is simple:
- Develop or modify a good strategy
- Monitor the chart for setup based on your strategy
- Enter and exit trades once the market structure setup meet your strategy
- Review your trading result at the end of every trading.
To be a successful forex scalpers you need to be focus, by being focus I mean consistently following and reviewing your strategy and trading only when your setup is ready. Most traders because of fear of missing out enter trades pre-maturely thus enduring unnecessary tension and may eventually lose equity.
The 5 Minutes scalping Forex Strategy
What you need
- 200 Exponential Moving average (add 200 EMA to your main chart)
- RSI period 14 for monitoring of divergency (add RSI to your indicator window 1)
Things to note
- Higher timeframe are for long term trade
- Lower time frame are for short quick term trade
How to use the strategy
- Mark up support and resistance zone on your chart with the 1 hour timeframe
- Switch to 5 minutes timeframe
- Trade only the trend, you can achieve this by zooming in to see what is going on in the overall trend
- Buy when the price is above the 200 EMA and take just 3 minutes candles; then sell when the price is below the 200 EMA and stay for just 3 minutes
- Don’t buy around the resistance zone or sell around a support zone (that is while you marked this zones on the one hour timeframe); you can only buy or sell after these zone based on the market structure.
No strategy is 100%, but you can make your strategy 100% by trading only the trends.