Traders divided when it comes to scalping. Some cringe at the thought of it thinking it is a surefire way to lose your money, while other think it is the only way to make money out of trading. Truth is both are wrong. It is not the only way to make money out of trading. Many traders have built their trading accounts swing trading. It is also not a surefire way to lose money, if you know what you are doing. In fact, many traders have made a fortune scalping the market. This is because scalping can churn your account pretty fast. If you are making money, you make more faster, while if you are losing money, you’d also lose it faster.
Silver Trend Forex Scalping Strategy is a scalping strategy that profits on the explosive moves on the 5-minute chart. It is not as fast as other scalping strategies, but it still allows you to churn your profits multiple times in a day on any pair.
The Silver Trend Indicator
The Silver Trend indicator is a trading indicator that provides entry signals based on a confirmed trend and multiple confluences within the indicator. It conveniently provides signals by placing arrows on the price chart pointing the direction of the trend. It prints dodger blue arrows pointing up whenever it detects a bullish trend reversal on the mid-term trend, and magenta arrows pointing down when it detects a bearish trend reversal. This allows traders to accurately pinpoint specific entries on a confirmed trend reversal.
The Free Scalping Indicator
The Free Scalping Indicator is a custom oscillating indicator that shows the market’s trend bias on the mid-term trend. It somehow acts much like the Awesome Oscillator (AO). It is an unbounded oscillating indicator that oscillates around zero.
The indicator plots histogram bars on its own window. If the indicator’s histogram bars are positive, it prints lime bars indicating that the market is bullish, while if the histogram bars are negative, it prints red histogram bars indicating a bearish market bias.
The crossing over of the midline or the changing of the color of the histogram bars could also act as an entry signal. You would notice that if used right, this indicator’s signals are very accurate and could give high probability entries.
Trading Strategy Concept
The Silver Trend Forex Scalping Strategy is a scalping strategy based on the confluence of the Silver Trend Indicator and the Free Scalping Indicator, which are complimentary indicators that work well on the mid-term trend.
Before considering entries, we will be filtering trades based on the long-term trend of the 5-minute chart. To do this, we will be making use of the 200-period Exponential Moving Average (EMA). The 200 EMA is a commonly used long-term trend among many traders. To determine the long-term trend, we will be looking at the location of price in relation to the 200 EMA. Whenever price is above the 200 EMA, the market will be considered on a bullish long-term trend, while if price is below it, then the market will be considered on a long-term bearish trend. The 200 EMA’s slope should also be considered, an upward sloping 200 EMA will be considered as bullish, while a downward sloping 200 EMA will be considered bearish. All trade setups should be aligned with the direction of the 200 EMA.
If the filter on the 200 EMA is already reviewed, then we could start considering trade setups based on the confluence of the Silver Trend Indicator and the Free Scalping Indicator.
Indicators
- 200 EMA (gold)
- SilverTrend_Signal_With_Alert_v3
- Risk: 27
- freescalpingindicator
Timeframe: 5-minute chart only
Currency Pair: major and minor pairs
Trading Session: Tokyo, London and New York session
Buy (Long) Trade Setup
Entry
- Price should be above the 200 EMA indicating a bullish long-term trend
- The 200 EMA should be sloping up indicating a bullish long-term trend
- The Silver Trend indicator should print a dodger blue arrow pointing up indicating a bullish reversal on the mid-term trend
- The Free Scalping Indicator should be printing lime positive histogram bars indicating a bullish mid-term trend
- Enter a buy order on the confluence of the above rules
Stop Loss
- Set the stop loss on the support level below the entry candle
Exit
- Close the trade as soon as the Silver Trend indicator prints a magenta arrow pointing down
Sell (Short) Trade Setup
Entry
- Price should be below the 200 EMA indicating a bearish long-term trend
- The 200 EMA should be sloping down indicating a bearish long-term trend
- The Silver Trend indicator should print a magenta arrow pointing down indicating a bearish reversal on the mid-term trend
- The Free Scalping Indicator should be printing red negative histogram bars indicating a bearish mid-term trend
- Enter a sell order on the confluence of the above rules
Stop Loss
- Set the stop loss on the resistance level above the entry candle
Exit
- Close the trade as soon as the Silver Trend indicator prints a dodger blue arrow pointing up
Conclusion
The Silver Trend Forex Trading Strategy is a scalping strategy that lives on strong trending moves on the 5-minute chart. This strategy allows traders to take trades that could result in profits which are multiples of the risk placed on the trade.
With this trading strategy, the key is with the trade management. This includes knowing where to place the stop loss, which is not too close to the entry level to allow the trade to breathe if in case the trade doesn’t push with a strong trend right away. Another skill that should be developed is knowing when to move the stop loss to breakeven. Traders may also profit even more if they could trail the stop loss at a logical distance from price, since this would allow them to squeeze more profits out of a winning trade.
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