Hello, my friend, and welcome to this tutorial on Forex Scalping Strategy. This is a simple forex scalping strategy demonstrated on a 5 min chart. You can use this to trade Forex for a living using this technique and system. Enjoy the video!

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Forex Scalping Strategy Video

Welcome, my friend, to this video tutorial on the forex scalping strategy. It’s a very simple one. I’m going to give you the simple basics, and then I’ll give you a couple of extra details that may help you increase your win-loss ratio. Now, this is a forex scalping strategy that works, so therefore, notice we’re not looking for a huge risk-reward on it. We are looking for a very good win-loss ratio.

Some of these will give you a pretty good risk-reward as well, but that’s not what we’re looking for and don’t plan out of. So if you get it great, but again, that’s not our goal here. Alright, so here’s the pattern and it’s pretty simple. First of all, you’ll see that I’ve got Bollinger Bands. Let me show you the indicators that I’ve got, pull them up here for you, so that you can see, and make sure you get all this right.

Using Bollinger Bands as Indicator

So I’ve got Bollinger Bands here and standard deviation of two period 20, and I don’t use the middle band, so I’ve got that set to transparent, and instead, the middle band I like to use the 15 EMA, and that’ll be my black line, alright? So that’s what you’ll see there, and there we go, Now that you know the parameters of this forex scalping strategy, so here’s what we’re looking for. The bottom line is we’re looking for a bar to have a real body outside of the Bollinger Bands with these settings. Okay, and that’s going to be our signal for a setup for a trade, and then I’ll show you where I get into the trade.

So you see we get it going out here. None of these bars against the real body. So it’s not just the highs. It’s not just the lows. That’s not what we’re looking for.

Get off the real body. In this case, it’s just a doji. In this case, we’ve got an entire red real body outside. Here we actually have a green body outside as well. So I want to show you that comes in a bit early there, doesn’t it? Then we get a red bar with a real body. So that’s what we’re looking for. That’s our signal, but not our trade. We don’t trade that bar, alright?

Trade Setup and Entry for this Forex Scalping Strategy

So what do we trade? Well, here’s what we trade. We look for that setup, and then we go over here and we say alright, so we’ve got from the upper Bollinger Band to the lower, and then we wait for the market to make a little higher there and kind of go sideways here, and then at this next low, it does not touch the lower Bollinger Band, alright?

So that’s where we would enter. Same here, we get our little pattern there outside the Bollinger Bands, touches here, does not touch here. So again, we make a higher high.

Basically, we’re looking for either a little higher low, equal low, or a little bit of a lower low without touching the Bollinger Bands. I’ll tell you my favorite is this kind where you actually get a higher high and it does not touch the Bollinger Band, but again, it could be any of those three.

The Trend is Your Friend Until the End

You want basically some sort of retest of that high, some sort of retest of that low, but the key is again, it cannot touch the lower Bollinger Band or the upper Bollinger Band, depending on whether you’re going long or short, alright? Now, the other thing that I’ll tell you is that it is a high probability trade, the further along in the move that it occurs. So here we’ve got this kind of moving here, there, there, and then just there. So if you wanted to count this, you could maybe count one, two, three.

That’s kind of short, worked out great, though. Here we go, one, two, three, four, five. So that’s even better. In other words, I don’t want to necessarily trade these. If, let’s say, for example, we had a candlestick real body go outside the Bollinger Band right here, because that would just be when impulse move, a single impulse move, and the principle here is the same as the trend is your friend until the end.

Using the Five-minute Chart for this Forex Scalping Strategy

So the longer the move continues, the less likely it is to continue, and therefore, this expanded or extended move is less likely to continue the longer the move goes, and that’s the reason for that principle. And then finally, we want to make sure that to the next higher timeframe, pull up your next higher timeframe, use some sort of momentum indicator, whatever you use to confirm your longer-term timeframe, get confirmation with a shorter term. Okay, so you see here I’m using a five-minute chart. You can use this in various time intervals. If you want, I’m not saying there’s any one particular one that’s better than another.

Five minutes again if you’re just scalping, looking for a few pips here and there, five, ten pips. Sometimes, again, you can get a lot. I mean this one worked really, really well. This turned out to be a lot better than just a little scalp, especially on a five-minute chart, but this one, no, that one turned out to be just a bit of a scalp, and we would get out of that like 15 pips or so.

Do Not Trade to Early in the Impulse Move

But hey, better than a kick in the groin, so that’s that. Let me show you one thing you want to avoid. So here’s an example where we just went down, you know, with one single impulse move, and we got a bar outside the Bollinger Band, so you know we would be then looking to go long here, but we’re not going to do that. Why?

Because that’s too early in the impulse move down. So that’s an example of that, an illustration of why when you’re early in a new impulse move, it’s more likely for it to continue in that direction, and so we don’t trade against it. You don’t want to trade against the dominant energy of the market early in a new trend. So if we’re going to trade against the trend, which is really what this type of trading is, then we want to wait to where we’re late in a trend, the odds are better that we’re going to have success.

Avoid Sideways Market

And the final filter that we want to avoid is when we get sideways markets like this, so even if I got a… and I don’t think there are any candlesticks that completely go out, no, there aren’t, by the way, just for clarity to this. This does not count.

What we need is the entire real body, in other words, the open and the close below the lower Bollinger Band or above the upper Bollinger Band. So again, I’m very clear about that. But when we’re in this kind of market, markets just kind of going sideways, slow volatility, that’s not the type of action that we’re looking for at all. So in that type of market condition, I would just not do anything.

Look for an Exhaustion of the Market Move

Certainly, I wouldn’t… well, I might do something like a breakout trade or something like that, but I’m not going to trade this particular forex scalping strategy. So try it out, and you can combine this with other things. As I said, what I’m sharing with you is just a very simple concept. We’re looking for an exhaustion of energy. That’s really the principle behind this.

The mathematical principle, as well as the mass psychology principle, is looking for an exhaustion of a market move, and this is one way to identify it with a rule-based approach. And then you’re welcome to combine any other indicators, chart patterns, candlestick patterns, and like I said, the next higher timeframe to confirm it that you’re currently using along with us.

Wrapping Up!

So if you found this helpful, feel free to leave a comment below. If you have any requests for future topics, leave those comments below as well. Give it a nice thumbs up.

That always encourages me to continue to create more free tutorials for you. And also, share it with others. Share good things with good people. So click the share button below.

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I’ve never seen anything else teach this particular price structure. So go get that by clicking on the green icon in the top right-hand corner of the video there, and that’ll take you to a page where you can opt-in, get the video for the rubber band trade strategy, along with some other great free tutorials, one of my little mini-courses, absolutely free, courtesy of Barry Burns here at Top Dog Trading.

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