Forex scalping strategies are dangerous because the market reacts to changes in supply and demand instantly, and technical indicators are late. Developers of tools try to solve this problem in different ways, experimenting with various kinds of indicators. I_Trend is an interesting hybrid development based on classic and combined tools. How it turned out to be working and useful is up to you. We will dwell on its essence and principles of strategy.
Forex Scalping Strategy
The price movement is a fight between the bulls and the bears. Periodically win one, then the other. To make a decision on whose side to take the side, you need to evaluate the strength of both the one and the other. The solution to this problem was proposed by Alexander Elder, who proposed two indicators Bulls Power and Bears Power. Both of these indicators in the complex make it possible to predict a potential trend change based on the following points:
- MA is a kind of arrangement between those who sell and buy an asset during a fixed time interval;
- Min (Max) price reflects the state of the market in which sellers (buyers) are stronger.
Bears Power is the difference between the minimum asset value and the 13-period sliding (Low-EMA). Bulls Power – between the maximum price and the 13-period High-EMA.
I_Trend is a combined indicator consisting of two lines. The green line (in basic settings) is the price difference from one of the lines of the Bollinger Bands. Red is the sum of Bulls Power and Bears Power data, multiplied by -1. Forex scalping strategy works on the 5-minute interval (M5) on the EUR / USD classic pair.
The main settings are related to the parameters of the Bollinger Bands. For Bulls Power and Bears Power, only the period is important.
Conditions for opening a long position:
- trading time – from 8.00 to 10.00 EET. The indicator works well in a volatile market, flat is better to avoid;
- the green I_Trend line is above 0.001;
- the red line I_Trend is below the -0.001 level.
The transaction opens on the candle, going after the signal, safety order – 7-10 points. Upon reaching 5 points of income, 50% of the transaction can be closed, the second 50% is insured by trailing.
Conditions for opening a short position:
- trading time – from 8.00 to 10.00 EET;
- the red line I_Trend is above 0.001;
- The green I_Trend line is below the -0.001 level.
Scalping Forex strategy can bring relatively small income and help you earn at the beginning of a strong surge. You can trade only one currency pair, since the entry signals appear almost every day. Find the pattern of the indicator is free on the Internet. If you did not find it or downloaded a template with different settings (another version of I_Trend), write about it in the comments. We will share it with you by sending a template by email.