Market Cap:
$200B
BTC Dominance:
66.79%
btc:
$7,390.26
eth:
$147.83
xrp:
$0.22
Advertise

Scalp Momentum MT4 Forex Trading Strategy

Sep 23, 2019
Scalp Momentum MT4 Forex Trading Strategy

This strategy is hinged on trading around a momentum candle. Coming from a relatively slow-moving or normal market, once a momentum candle appears, which is substantially bigger than the preceding candles, we ready ourselves for the price action that might follow.

How big a candle are we looking for? This is not a hard and fast rule because different currency pairs and markets have different ranges. But for example, on a market where price moves 1.5 to 3 pips within a given 1-minute candle, a candle that is 10 pips long and is full-bodied could be considered a momentum candle.

The momentum move could also be a few candles long, two, three, even five candles long, as long as the candles are characterized as momentum candles.

After such a thrust with momentum candles, we will be observing for the price to retrace for a few candles. It should be short and shallow, not 10 candles of retracement and should be just less than 30% of the momentum thrust. After the retracement phase, we wait for the price to roll back over signaling a probable resumption of the momentum. Then we could setup our trade using stop orders.

Timeframe: 1-minute or 5-minute chart

Currency Pair: major pairs and some volatile crosses

Trading Session: whenever the market of the currency being traded is open

How to trade with Scalp Momentum MT4 Forex Trading Strategy?

Buy (Long) Trade Setup

Entry:

  • A bullish momentum candle or thrust should appear approximately around 3 to 5 times the size of preceding candles
  • Wait for price to retrace with small bearish candles
  • Price should not retrace more than 30% of the thrust
  • Wait for some signs of price resuming the trend
  • As soon as some small bullish candles appear to place a buy stop entry order a few pips above the swing high

Stop Loss

  • Set the stop loss just a few pips below the swing high

Exit

If price makes another strong thrust on the resumption of the momentum, trail the stop loss by approximately the same distance as the initial stop loss.

Sell (Short) Trade Setup

Entry:

  • A bearish momentum candle or thrust should appear approximately around 3 to 5 times the size of preceding candles
  • Wait for price to retrace with small bullish candles
  • Price should not retrace more than 30% of the thrust
  • Wait for some signs of price resuming the trend
  • As soon as some small bearish candles appear to place a sell stop entry order a few pips below the swing low

Stop Loss

  • Set the stop loss just a few pips above the swing low

Exit

  • If price makes another strong thrust on the resumption of the momentum, trail the stop loss by approximately the same distance as the initial stop loss

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 “Scalp Momentum MT4 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.

Premium Brokers

Your capital is at risk.