This is an easy to use system to begin scalping any fast moving market. It uses the Guppy Moving averages indicator for Mt4, and a really short RSI setting of 3. Read on and learn how to use it, and get the files to set up your scalping template.
First of all, we all know that trading with the underlying trend is the best way to scalp a few pips of profit. You can try scalp reversals at tops or bottoms, but in my experience you are opening your heart to failures which will bring out emotions of failure. An emotion which can be dangerous, and create fear for the short term scalper.
Use The 15 Minute Trend For Set Ups
When you set up your charts for this system, pick two or three low spread pairs. This is a scalping system, so we want to be trading high liquidity pairs, with low spreads. This most often means, EURUSD, GBPUSD, USDJPY and you can also try this on major indices like Dax, S&P500 and Dow Jones.
Add the indicators to your MT4 indicator folder, add the template to the template folder. Restart your MT4 platform, then open the charts and apply the provided template.
Set the charts to 15 minute timeframes.
What you need to be looking for is a trend. A good 15 minute direction is signaled by the orange Guppy moving averages being above or below the blue, long setting, moving averages.
Once you identify the direction, watch the RSI 3 for a pullback. The best pullbacks are when the RSI 3 goes down below 30 or above 70.
Look at the Guppy averages, at this point are they squeezing?
See the chart below. The RSI 3 has dropped below 30, the price is squeezing the orange guppys down, thin, to the blue guppys.
When you see this happen, that is when you switch to the 5 minute chart.
5 Minute Entry for the Scalping
Now you have identified a pullback in 15 minute trend, you need to watch for signs of a bounce.
As with any trend, it can end. So wait for a 5 minute bounce. Do not just buy or sell blindly on a 15 minute pullback.
Look at the chart below. The area shows the same 15 minute pullback, the look at the price begin to break above the last few 5 minute price bars.
This is where you enter. Your stop should be under the low recently made, and you should be prepared to move this up to breakeven fast once the trade heads in your direction.
Take what you can. This is scalping. There is no hard or fast rule. The rule you need to follow is move your stop, and try never to close at a loss.
Take 4, 5, 6, 7, or 10 pips. Take what you can, as long as you pull that stop up fast, you will end up winning more than losing.
Yes, you will get stopped out at breakeven a lot, that is part of trading. Yes, you will get occasional losing trades. That is also part of trading.
But don’t let it defeat you. Test it on demo, be fast, be ruthless. Protect your capital with aggression, and the profit will follow.
Here are the files to get started.
from DayTradingSite.com http://www.daytradingsite.com/fast-scalping-system-using-the-guppy-moving-averages-for-mt4/