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7 & 14 SMA Scalp Forex Trading Strategy

Sep 09, 2019
7 & 14 SMA Scalp Forex Trading Strategy

You can now download the 7 & 14 SMA Scalp Forex Trading Strategy for free on AtoZ Markets indicators gallery.

With this strategy, we will be trading candles that we believe have momentum and that the next candle would ignore consolidation.

At the beginning of a new candle, there is often a few minutes wherein price don’t seem to move much. This is because many astute traders know that as candle forms, other traders would make decisions based on the type of candle that was formed. No one would know what would happen next. Price may either continue the direction of the previous candle, or it may reverse. This few minutes window of indecision by the market is called consolidation.

To do this, we will be using 7 & 14 Simple Moving Averages (SMA). We will also be targeting only five (5) pips. If the candle really does have momentum, a 5-pip target would be easy.

Although this is a scalping strategy, we will still be using the 1-hour timeframe. This is because more traders are looking at the hourly candles as compared to the lower timeframes. If the previous hour does have momentum, traders looking at the candle on the next hour would immediately enter based on candle patterns without waiting on the consolidation phase. This volume of traders would push momentum further.

Timeframe: any

Currency Pair: any

Trading Session: any

How to trade with 7 & 14 SMA Scalp Forex Trading Strategy?

The rules of this strategy will be based on how a candle opens and closes in relation to the 7 & 14 SMAs.

Buy Setup:

  • The 7 SMA should be above the 14 SMA.
  • On the signal, candle price should open in between the 7 SMA and the 14 SMA.
  • On the same candle, price should close above the 7 SMA.
  • There should only be a little to no wick above the signal candle.
  • The low of the candle should not go below the 14 SMA.
  • Enter immediately at the open of the next candle.

Stop Loss: Stop loss should be 5 pips below the entry price.

Take Profit: Target take profit price should be 5 pips from the entry price.

Sell Setup:

  • The 7 SMA should be below the 14 SMA.
  • On the signal, candle price should open in between the 7 SMA and the 14 SMA.
  • On the same candle, price should close below the 7 SMA.
  • There should only be a little to no wick below the signal candle.
  • The high of the candle should not go above the 14 SMA.
  • Enter immediately at the open of the next candle.

Stop Loss: Stop loss should be 5 pips above the entry price.

Take Profit: Target take profit price should be 5 pips from the entry price.

How to download and install an indicator?

In order to install the indicator on your MT4 platform, you need to follow these steps:

  1. Click on “Download Indicator” button located at the top right corner of the screen.
  2. Save the file to your computer.
  3. Extract and move the files into MT4>Indicator folder of the MetaTrader4 software file directory.
  4. Restart your Metatrader platform.
  5. Navigate to “Indicators.”
  6. And select “7 & 14 SMA Scalp Forex Trading Strategy” template to apply it on the chart.

Note: This indicator was developed by T. Morris. AtoZ Markets does not carry any copyrights over this trading tool.

 

Disclaimer: The views and opinions expressed in this article are solely those of the author and do not reflect the official policy or position of AtoZ Markets.com, nor should they be attributed to AtoZMarkets.