You’re a day trader who likes to take advantage of smaller and faster price movements. You’ve heard about the 5-Minute Forex Scalping System With Stochastic And Supertrend Indicator and decided to give it a try.
We are going to cover the entire strategy from setting up your Forex charts to buy and sell rules for the system. It is a very simple scalping system with only a few trading rules and is not difficult at all.
Setting Up Your Trading Charts
Indicators you need for this 5-minute forex trading strategy are pretty basic and some of your platforms, like Tradingview, may already have them:
- SuperTrend Indicator MT4 (free download)
- Stochastic Oscillator (%K period: 7, %D period:3) – (a great momentum indicator)
- Best timeframe to trade: 5-minute charts
- Trading Sessions: Both the UK and US sessions are good to use
- Currency Pairs: EURUSD, GBPUSD, GBPJPY, EURJPY, AUDUSD, USDJPY, USDCHF
- the price must be trading above the Supertrend line.
- check to see if Stochastic touches the 20 level or goes below it.
- if the above two conditions are met, initiate a buy order 2 pips above the candle
- place your stop loss 1 pip below the Supertrend line.
- aim for 10 pips profit target
Short (Selling) Rules
- the price must be trading below the Supertrend line.
- check to see if the Stochastic indicator crosses the 80 level or touches it
- if the above two conditions are met, initiate a sell order 1-2 pips below the candle
- place your stop loss 1 pip above the Supertrend line.
- aim for 10 pips profit target
Why Use Stop Orders
The great thing about stop orders is that prices must move in your direction for you to be in the trade. If using a buy-stop order, the short-term momentum must be in your favor. If not, you won’t be triggered into the trade.
This helps avoid entering trades while the price is moving against you. Given we are using 1 pip buffers around the Supertrend indicator, we like to see positive price action.
Demo Trading + Testing
Given the risk involved with trading (especially the faster time frames), it is recommended to test this strategy on a demo account first. Demo trading allows you to practice and get familiar with the system without the risk of losing any of your money.
Once you are comfortable with the rules and have achieved consistent results in your demo trading (and results you like), then you can transition to live trading the strategy.
Conclusion
The 5-Minute Forex Scalping System With Stochastic And Supertrend Indicator is an effective and easy-to-use strategy for day traders. It combines momentum as shown by the Stochastics indicator, with the trend-following SuperTrend indicator and provides simple entry rules to buy and sell.
By using this system, you can take advantage of smaller and faster price movements, while setting stop losses and profit targets that protect your downside and offers a good risk:reward.
This system is suitable for both the UK and US trading Sessions and can be used on several currency pairs. As with any strategy, it’s important to practice proper money management techniques for the best results.
Hope you’ve enjoyed this5 Minute Forex Scalping System With Stochastic And Supertrend Indicator.
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