Strategy “Cutting Points”

Strategy “Cutting Points”

Recommended timeframes M5

We offer for your consideration one of the speculative strategies on the Forex market. This is a scalping strategy and it is recommended to be used on the calm market when the price chart is moving in a sideways channel. It is also worth noting that low spread and fast order execution are also necessary conditions for the strategy to work.

Instruments: major instruments with low spread such as EUR/USD, GBP/USD, AUD/USD, USD/CAD (instruments may vary depending on the spread offered by your broker).

Timeframe: M5.

Indicators used:

• Bollinger Bands (20, 2);

• ADX  (14 period);

• RSI (7 period).

When to buy:

• The price is on or above the upper MA of Bollinger Bands;

• The RSI is above the 70 mark;

• The ADX is below the 30 mark;

• Open short positions when the price returns below the upper MA of Bollinger Bands.

When to exit:

• TP on the middle MA of Bollinger Bands;

• Quick TP 3-5 points away from the opening level;

• SL 3 points above/below the lower/upper MA of Bollinger Bands.

It is not recommended to trade 30 mins prior to macroeconomic news releases. The condition that the RSI > 70 or < 30 is not compulsory. The most important in this strategy is to determine the right moment for trading when the price remains in the sideway range.