Here’s another simple forex scalping strategy for GBPUSD and EURUSD. So if you are a trader that is looking for a forex scalping strategy to trade the EURO or the the GBP, you can try this one. This simple forex scalping systems involves price action trading with a use of a very specific candlestick pattern.
Timeframes: 5minutes only
Forex Indicators: RSI with settings to 14 periods.
Currency Pairs: GBPUSD & EURUSD
Trading Sessions: Use London and New York Forex Trading Sessions for this system
Now, this scalping strategy also requires that you know what a shooting star candlestick is and what it looks like.
WHAT IS A SHOOTING STAR CANDLESTICK?
This is what a shooting star candlestick looks like:
So when a shooting star candlestick forms on a chart, what does it tell you?
- when it forms in an uptrend market, it indicates bearishness. The color of the candlesticks does not matter, red or green, if its a shooting star, its all bearish.
Therefore, this scalping strategy is for selling only…no buying.
THE SELLING RULES
- The market must be up (in an uptrend)
- Check if the RSI line is above 70 which indicates an oversold condition.
- next, check to see if your see a shooting star candlestick and if you see one, go to step 4.
- place a pending sell stop order 1-2 pips under the low of that shooting star candlestick
- next thing you do is to place your stop loss 1-2 pips above the high of that shooting star candlestick
- then you also have to set your take profit target. You can do that by setting at 50 % level of the rally move or you can also use the previous swing low zone or level as your take profit target level.
ADVANTAGES OF THE FOREX SCALPING STRATEGY FOR GBPUSD AND EURUSD
- during the london and new york forex trading sessions,the market is very liquid and you can make some quick profits using this scalping system.
- its a very easy forex scalping system to use.
- the shooting star candlestick is a very bearish candlestick and it formation only reinforces that bearishness and what you will tend to see is that after a shooting star candlestick forms, the price tends to fall so this trading system allows you to capture that price drop after the shooting star candlestick forms.
DISADVANTAGES OF THE FOREX SCALPING STRATEGY FOR GBPUSD AND EURUSD
- Don’t try using this forex scalping strategy during the ASIAN trading session. There no much volatility in that trading session and there’s the possibility that the performance of this forex scalping system may not really be good.
- be careful not to over trade because fx scalping is a high pressure fast paced trading environment and you can lose all your money trading like this.
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