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Scalping system #4 (5 pips with GBP/USD)


This simplified trading system derived from the previous “2 SARs to go” system and is a work of our dedicated scalper – Alex Wakemann. Thank you, Alex! His scalping insights will be published and updated on our pages as we move on. With this Forex scalping system Alex claims to always get at least 5 pips per trade.

Trading setup

Trading pair: GBP/USD
Time frame: 5 minute chart
Indicators:
MACD (5, 8, 9)
SAR on MACD (0.1, 0.11)
SAR on the chart (0.1, 0.11)

Trading rules
Trade only from 7:30 am EST to maximum 11:30 am EST. Preferred days – Tuesday to Friday.
Once both SARs are in agreement, e.g. suggest the same buy or sell opportunity – enter with either 1 order (to get 5 pips and leave the trade) or 2 orders at once (to chase the market further).
A stop loss is adjusted upon entry to the last but one SAR dot on the chart. If at the moment of the entry there is only one dot on the chart – set stop at this dot.

Profit targets – 1st – 5 pips.
2nd – only when an opposite signal appears – both SARs change direction or when the stop (by that time it is usually a profit stop or at least a break even situation) is hit.
If before that you feel that profits are already high to keep – lock them in earlier.

FOREX SCALPING SYSTEM

Now about exits:
If while keeping an open trade one SAR suggests an opposite trend, but the other does not – stay in trade.
Remember – a stop loss is always at the second nearest SAR dot on the 5 min chart.
With each new SAR dot – adjust stops for all orders to the second nearest SAR dot.
Why second? I found that very often the first SAR dot can be hit, but the second will hold. At that time I do not move my stop and sit tight until the SAR reverts and I can continue trading.

Additional notes: want even a better entry? Then open an additional 1 minute chart with the same settings and once got a signal from 5 min chart, look at 1 minute. Does the price confirms/moves in your direction or is it going the opposite way (temporarily making small corrections)? With the second option you have a time to wait until the price on 1 minute chart aligns with 5 minute chart.

Happy Forex scalping!


Alex Wakemann,
http://forex-strategies-revealed.com/

Copyright © Forex Strategies Revealed

is there a way to place a sar on the macd with mt4?
I'm sorry, I don't have a solution... This strategy is very new, and I've been developing, testing and trading it only with Oanda so far and never coded/tried it on mt4.

Very interesting method.
Does the 5 pips per trade include spread?
Regards
Mark

Hi Mark,
No it's without the spread. The strategy allows you to cover the spread cost and then make 5 pips on top.

Regards, Alex.

Thanks for prompt reply.
Will give it a try.
Excellent site with some great ideas!
Regards
Mark

Hi Alex
On the above illustration I have noticed that there is a pink line on the chart which seems to follow the SAR dots.Is this a moving average?I don't seem to have it on my Oanda chart.
Also have you any more tips on this method of scalping?
Regards
Mark

Hi Mark,

That's in fact pink EMA I left on the chart while making this sreenshot, probably standard 14 period. I remember I was trying to twist it to filter some trading signals. You may test it too.

The idea is that when you get a signal from both SARs (same as in the rules above) you also check on a position of a candle against 14 EMA: if both Sars tell to Buy and a candle is trading above 14 EMA - this signal should offer a safe entry; if the candle is below 14 EMA - risks are higher and if I'm not up to it - I stay out and wait.

Try it out and tell me what you think about it.
Regards
Alex

Hi Alex
Thanks once again for the prompt reply.
I have been following the system for some time now and as with all systems it works best when you check for trends on a longer time scale chart.Will keep testing!
Thanks again for your time and effort.
Regards
Mark