“Buy low, sell high.” This is the only way to make money in the forex market. There is of course the exact opposite, which is selling high and buying low, which applies for shorting the market. Get these two right and you are on your way to make money out of the forex market.
But how would you know if price is low enough to buy or high enough to sell?
Well, you don’t. Trading is all about probabilities so you would never know where the market is going. What you could do though is assess if price is not too high to buy or too low to sell.
Traders are often guilty of buying at the peak or selling at the bottom. However, there is a way to ascertain that you are never buying at the peak or selling at the bottom. This is by waiting for mean retracements to occur.
Mean retracements occur when price would revert to its average. Prices that are close to the average could arguably be not too high or not too low because it is near the average. These areas are reasonable areas to trade. As soon as you see price starting to shift momentum to one direction coming from the mean, then it may be a signal to trade towards the direction of the new momentum while trading at a reasonable price.
Bykov Signal Forex Scalping Strategy allows traders to trade momentum signals coming from the mean. This allows traders to trade at a better price prior to the rapid price movement that comes after a momentum shift.
50-Period Exponential Moving Average (EMA)
Table of Contents
- 1 50-Period Exponential Moving Average (EMA)
- 2 Buyers vs. Sellers v3
- 3 Bykov Trend Signal
- 4 Trading Strategy
- 5 Conclusion
There are many ways to identify if price has reversed or retraced back to its mean. There are oscillators and other indicators that could help with this.
One of the most basic yet very effective ways to identify mean retracement is through moving averages. Price would often push away from the mean during expansion phases, yet it would always come back to the mean based on moving averages at some point. Then, after such mean retracement, price would usually bounce off it. This is the reason why moving averages often act as dynamic areas of support or resistance whenever price touches it.
The 50-period Exponential Moving Average (EMA) is a popular moving average which price would often bounce off from on the lower timeframes. This is because the 50 EMA corresponds to shorter period moving averages on the higher timeframes, such as the 20-period moving average. These moving averages are very effective during trending markets.
Buyers vs. Sellers v3
The Buyers vs Sellers indicator is a custom indicator which aids traders in identifying whether it is the bulls (buyers) or bears (sellers) that are dominating the market. It does this by printing bars on a separate window. Bullish bars are colored lime while bearish bars are colored red.
This indicator works well as a market sentiment filter. It allows traders to trade only in the direction of the market’s directional bias.
Bykov Trend Signal
The Bykov Trend Signal indicator is a momentum indicator which helps traders identify trade direction as well as the exact entry points.
This indicator provides entry signals based on momentum shifts. It then conveniently places an arrow on the candle where it detects a momentum shift. These arrows could be used as an entry signal.
This trading strategy trades on momentum signals after a mean retracement or whenever price is located near the average price.
The strategy identifies the mean using the 50 EMA line. Price should retrace or should be located near the 50 EMA line to be considered as a viable trade. Trades should also be taken in the direction where price is located in relation to the 50 EMA. This ensures that we are not trading against a dynamic support or resistance, but rather trading bounces off it.
Trend direction and market sentiment should also be confirmed based on the Buyers vs. Sellers indicator.
Trades could be taken as soon as the previous two conditions are confirmed and the Bykov Trend Signal indicator prints an entry signal in the same direction.
- 50 EMA
- BvS v3
- BvSPeriod: 30
- RISK: 15
- SSP: 18
Preferred Time Frames: 5-minute chart
Currency Pairs: EURUSD, GBPUSD, USDJPY, EURJPY and GBPJPY
Trading Session: Tokyo open (JPY pairs); London session (EUR & GBP pairs); New York session (USD pairs)
Buy Trade Setup
- Price should retrace or be near the area of the 50 EMA.
- Price should close above the 50 EMA.
- The Buyers vs. Sellers indicator should be printing lime bars indicating a bullish trend direction.
- The Bykov Trend Signal indicator should print an arrow pointing up indicating a bullish entry signal.
- The Buyers vs. Sellers and the Bykov Trend Signal indicators’ bullish signals should be closely aligned.
- Enter a buy order on the confirmation of the conditions above.
- Set the stop loss on the fractal below the entry candle.
- Close the trade as soon as the Buyers vs. Sellers indicator prints a red bar.
- Close the trade as soon as the Bykov Trend Signal indicator prints an arrow pointing down.
Sell Trade Setup
- Price should retrace or be near the area of the 50 EMA.
- Price should close below the 50 EMA.
- The Buyers vs. Sellers indicator should be printing red bars indicating a bearish trend direction.
- The Bykov Trend Signal indicator should print an arrow pointing down indicating a bearish entry signal.
- The Buyers vs. Sellers and the Bykov Trend Signal indicators’ bearish signals should be closely aligned.
- Enter a sell order on the confirmation of the conditions above.
- Set the stop loss on the fractal above the entry candle.
- Close the trade as soon as the Buyers vs. Sellers indicator prints a lime bar.
- Close the trade as soon as the Bykov Trend Signal indicator prints an arrow pointing up.
This strategy works well as a retracement or congestion bounce type of strategy off a dynamic support or resistance, which in this strategy would be the 50 EMA. This strategy allows for very huge gains which is typical in these types of strategy.
However, bounces off a dynamic support or resistance is not always a high probability type of strategy. One of the best ways to improve win rates using this strategy is to incorporate a price action type of strategy such as price or candlestick patterns, or support and resistance breakouts. It would also serve this strategy well if it is aligned with the higher timeframe trend direction.
Forex Trading Strategies Installation Instructions
Bykov Signal Forex Scalping Strategy is a combination of Metatrader 4 (MT4) indicator(s) and template.
The essence of this forex strategy is to transform the accumulated history data and trading signals.
Bykov Signal Forex Scalping Strategy provides an opportunity to detect various peculiarities and patterns in price dynamics which are invisible to the naked eye.
Based on this information, traders can assume further price movement and adjust this strategy accordingly.
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How to install Bykov Signal Forex Scalping Strategy?
- Download Bykov Signal Forex Scalping Strategy.zip
- *Copy mq4 and ex4 files to your Metatrader Directory / experts / indicators /
- Copy tpl file (Template) to your Metatrader Directory / templates /
- Start or restart your Metatrader Client
- Select Chart and Timeframe where you want to test your forex strategy
- Right click on your trading chart and hover on “Template”
- Move right to select Bykov Signal Forex Scalping Strategy
- You will see Bykov Signal Forex Scalping Strategy is available on your Chart
*Note: Not all forex strategies come with mq4/ex4 files. Some templates are already integrated with the MT4 Indicators from the MetaTrader Platform.
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