5 Minute Forex Scalping Strategy Using Parabolic SAR And 200 EMA

This is a 5-minute forex scalping strategy using Parabolic SAR and a 200 exponential moving average indicator. This strategy might look difficult to some traders at first glance but it is quite simple if you can understand the signals of the indicators.

The rules of this trading strategy are clearly defined and easy to follow, making it one of the simplest and most effective scalping strategies available.

Setting Up Your Chart

To begin, you will need to set up your chart with the following indicators:

• Parabolic SAR (0.02 step)
• 200 exponential moving average applied to the close
• 10-period EMA applied to close
• De-munyuk indicator (optional)

Currency Pairs to trade with this Forex strategy: any with low spread, like EURUSD, GBPUSD, USDJPY

Trading Sessions: London, US

Timeframe: 5-minute Forex chart

 

Long (Buy) Rules

1. Price must be above the 200 ema (this tells you its an uptrend)
2. Parabolic SAR dots appear below the price (this indicates bullishness)
3. !De_Munyuk indicator must be green or flips from red to green (short term uptrend) (OPTIONAL)
4. Price closes above the 10 period moving average
5. Set take profit at 15 pips and a stop loss below the entry candle

 

Short (Sell) Rules

1. Price must be below the 200 ema (this tells you its a downtrend)
2. Parabolic SAR dots appear above the price (this indicates bearishness)
3. !De_Munyuk indicator must be red or flips from green to red (short term downtrend) (OPTIONAL)
4. Price closes below the 10 period moving average
5. Set take profit at 15 pips and a stop loss above the entry candle

This chart shows four trade entry areas highlighted with arrows.  We have 3 winners and one loser.

The losing trades sets up with a large candlestick with a larger range than others before it.  You may want to include a rule that stands aside on those trades and wait for a pullback.  Once price pulls back and then breaks the 10 period moving average, you’d enter a trade in the direction of the 200 EMA.

5 Quick Points

• Use Parabolic SAR and 200 EMA to scalp forex in a 5-minute timeframe

• Currency pairs should be low spread, such as EURUSD, GBPUSD or USDJPY

• Trading Session: London and US

• Long (Buy) Rules: Price must be above the 200 EMA, PSAR dots appear below the price, De-Munyuk indicator must be green *, Price closes above 10 periods MA

• Short (Sell) Rules: Price must be below the 200 EMA, PSAR dots appear above the price, De-Munyuk indicator must be red *, and Price closes below 10 periods MA. Set take profit

*= optional indicator

Conclusion

This 5-minute forex scalping strategy using Parabolic SAR and a 200 exponential moving average indicator is an effective way to trade the markets. It’s simple to understand and easy to implement for traders of all levels.

If you have found this post helpful or any other of our Forex trading strategies, please feel free to share it with other traders who may benefit from it.

Good luck and happy trading!

Updated:  Mar 2023