Dear Dukascopy community. I stated trading in smaller timeframes. Wanted to test scalping. So far it was working. In addition, i want to share it with you. We will need to setup our chart first. I will explain systematically.
Our setup:
  1. We need to add 55 sma and 144 sma.
  2. Then add Bollinger Bands. Setting will be 21 for period and 2 for deviations.
  3. After that, we add Stochastic. Settings will be 8 for period and 3 for both sma.


How we trade?
Rulse 1: Trend is your friend!


144 SMA and 55 SMA are for following general trend. Yes, I know that we try to be smarter than everyone and catch the trend reversal but let us be realists and just keep following trend. When slow sma is above fast sma then we have declining trend. However, if fast sma is above the slow sma then market is in rising trend. We are prefer sharp trends. Sharper than 40degree is better.

We will look into Bollinger’s central and lower Bands in rising trends and upper and central bands for declining trends. Central band of Bollinger have to be above 55 sma and rising for us to think about buying in rising trend. In a declining trend central band and have to be below 55 sma.

Stochastic indicator will help us enter and exit the market. In a rising trend we will look for direction change up bellow 50 level and in falling trend we will hunt for direction change down above 50 level.

Example:
In this eurusd chart, we see that fast sma climbed above the slow sma.

144 SMA is rising so we now that we are still in strong rising trend. In addition, 55 sma is accelerating power to rise again. Central Band is above 55 sma. In this situation, we look to Stochastic. Every time stochastic makes changes its direction up, bellow 50 level, we make buy. We also may buy a bit earlier if price reaches important support and resistance zone.
First Buy - Price is close to central Bollinger band. Stochastic is below 50 and touching 20 level. We put buy and make Stop Loss bellow nearest resistance zone -8 pips. We close when stochastic changes its direction down above 50 level. We make at least 7 pips here. Second Buy- Price touches central band and stochastic changes its direction up bellow 50 level. We make buy. We put Stop loss on closest resistance zone. We close when stochastic changes its direction down above 50 level. We make at least 10 pips here. Third Buy- Price touches central band and stochastic changes its direction up bellow 50 level. We make buy. We put Stop loss on closest resistance zone. We close when stochastic changes its direction down above 50 level. We make here at least 15 pips. Fourth Buy- Price touches central band and stochastic changes its direction up bellow 50 level. We make buy. We put Stop loss on closest resistance zone. Price falls bellow central band and reach our Stop Loss. We lose here at maximum 7 pips. Fifth Buy- Price faced resistance close to lower band and 55 SMA. Stochastic changes its direction up bellow 50 Level and it is close to 20 level. Therefore, we make buy. We make at least 9 pips here. Alarm!

Price fall bellow central band and 55 sma. We se price strugles to rise above and stop looking for buy opportunities. Market is changing. We should wait for our setup and next sharp trend.

We made 7+10+15-7+9 =34 Pips here. Not Bad İ think!
Translate to English Show original