The 5-8-13 forex scalping trading strategy is a scalping technique that is based on the MACD_OsMA.ex4 custom indicator and the 5-8-13 exponential moving averages depicted by the red, blue and magenta lines respectively.
Chart Setup
MetaTrader4 Indicators: MACD_OsMA.ex4 (default setting), 5-8-13 Exponential Moving Average (default setting)
Preferred Time Frame(s): 1-Minute, 5-Minutes, 15-Minutes
Recommended Trading Sessions: Any
Currency Pairs: any
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Download the 5-8-13 Forex Scalping Trading Strategy
Buy Trade Example (Click the picture for full size view)
Fig. 1.0
Strategy
Long Entry Rules
Place a buy order when the following chart rules or conditions are in display:
- If the 5 EMA (red) crosses the 8 EMA (blue) and the 13 EMA (magenta) upwards and they tend to form an intersection, it indicates that price is about to take an upward spin. Furthermore, sequel to such if a bullish candle closes above the 5 EMA (red), initiate a buy position.
- The MACD OsMA starts off with its silver line crossing the red line upwards, while its silver histograms forms above the 0.00. Once this setup is in place, it is an indication that price is pushing higher and does make sense to enter a buy.
Stop Loss for Long Entry: Place stop loss ~ 5 – 15 pips below entry price.
Exit Strategy/Take Profit for Long Entry
The following conditions or rules will define the exit/take profit strategy as shown below:
- If the price closes below the red line (5 EMA) on the activity chart, it is an indication of a looming reversal. Seemingly, if the EMA lines intersect after which price closes below the 5 EMA, it indicates price reversal to the down side.
- If the silver line of the MACD OsMA custom indicator crosses the red downward, it is a downward reversal signal.
Sell Entry Rules
Enter a sell if the following conditions or rules are on display on the activity chart:
- If the 5 EMA (red) crosses the 8 EMA (blue) and the 13 EMA (magenta) downwards and forms a somewhat intersection, it indicates that price is heading lower. Seemingly, if a bearish candle closes below the 5 EMA (red), initiate a sell order.
- If the silver line of the MACD OsMA custom indicator crosses the red line downward, while is silver colored histograms forms below the 0.00 level, it is an indication of downward price pressures.
Stop Loss for Sell Entry: Place stop loss ~ 5 – 15 pips above entry price.
Exit Strategy/Take Profit for Sell Entry
Exit or take profit on position(s) if the following conditions hold:
- If a bullish price bar forms above the 5 EMA line, owing to the intersection of the EMA lines, an exit or take profit is advised.
- If the silver line of the MACD OsMA crosses the red line upwards, it is a reversal signal, thereby prompting an exit or take profit strategy.
Fig. 1.1
Free Download
Download the 5-8-13 Forex Scalping Trading Strategy
About The Trading Indicators
The MACD_OsMA.ex4 custom indicator designed after a Simple Moving Average (alert) and two EMAs (cross). Signals from this indicator are delivered when the MACD histogram is aligned above or below the 0 mark for bullish or bearish trend respectively.
The 5 EMA, 8 EMA and 13 EMA are drawn on the activity chart to plot the mean price while giving more weight to the latest price.
FAQs
The best forex scalping strategies involve leveraged trading. Using leverage in forex is a technique that enables traders to borrow capital from a broker in order to gain more exposure to the forex market, only using a small percentage of the full asset value as a deposit.
Is the 5 EMA strategy profitable? ›
The setup makes our trading more profitable with minor losses and major profits. Let's know what EMA stands for: “Exponential Moving Average” is a technical chart indicator that tracks the price of a stock/index over time, giving more importance to recent price data.
What is 5 8 13 moving average? ›
5-8-13 Moving Averages
The combination of five, eight, and 13-bar simple moving averages (SMAs) offers a relatively strong fit for day trading strategies. These are Fibonacci-tuned settings that have withstood the test of time, but interpretive skills are required to use the settings appropriately.
What is the 8 13 21 55 EMA strategy? ›
What are the buy and sell signals in the 8, 13, 21 EMA strategy? A typical buy signal is generated when the 8 EMA crosses above both the 13 and 21 EMAs, suggesting a bullish trend. Conversely, a sell signal is indicated when the 8 EMA crosses below the 13 and 21 EMAs, suggesting a bearish trend.
What is the most successful scalping indicator? ›
The EMA indicator is regarded as one of the best indicators for scalping since it responds more quickly to recent price changes than to older price changes. Traders use this technical indicator for obtaining buying and selling signals that stem from crossovers and divergences of the historical averages.
What is the easiest scalping strategy? ›
A one-minute scalping strategy is a great technique for beginners to implement. It involves opening a position, gaining some pips, and then closing the position shortly afterwards. It's widely regarded by professional traders as one of the best trading strategies, and it's also one of the easiest to master.
What is the win rate of the 5 EMA strategy? ›
According to Subhashish Pani this strategy has 60% success rate. When ever a Candle closes completely above 5 ema (no part of candle should be touching the 5ema), then that candle should be considered as Alert Candle.
Which trading strategy has the highest success rate? ›
Indicator-Based Directional Trading
This strategy uses an indicator to determine the direction of the trade. The indicator provides a clear signal when it's time to enter or exit a trade, making it easy to work with. Traders who use this strategy can expect to see consistent results and high success rates.
What is the best EMA combination? ›
The 5-8-13 Exponential Moving Average (EMA) combination is a favored tool among day traders, providing a responsive and precise insight into fast moving markets. By applying this EMA trio effectively along with other indicators, you can significantly refine your entry and exit points.
Which EMA is best for a 1 hour chart? ›
Using the 50-period EMA can tell you the support and resistance levels in the 1-hour time frame chart during the intraday trading. Compared to 20-day MA, 50-day period MA can give a better picture for formulating the next day's trading strategies.
The 21-day exponential moving average (EMA) can be a powerful tool for investors. Though it is most powerful in a bull market, it has plenty of use during bear markets as well. Like the commonly used 50-day moving average, the 21-day takes the closing prices of the past 21 sessions and averages them out.
Which EMA is best for forex? ›
The most commonly used EMAs by forex traders are 5, 10, 12, 20, 26, 50, 100, and 200. Traders operating off of the shorter timeframe charts, such as the five- or 15-minute charts, are more likely to use shorter-term EMAs, such as the 5 and 10.
How to use EMA indicator for scalping? ›
This scalping strategy involves the use of several EMAs with different time frames. For example, scalpers generally use 10 EMA, 20 EMA, 50 EMA, and 100 EMA. The EMAs are then plotted on the chart in a ribbon-like formation, running parallel. This ribbon can be used to identify the direction and momentum of the trend.
What is the best EMA length for day trading? ›
The 8- and 20-day EMA tend to be the most popular time frames for day traders while the 50 and 200-day EMA are better suited for long term investors.
What is the best forex pair for scalping? ›
Scalpers tend to follow the most major pairs which are traded, and their most preferred pairs are EUR/USD, USD/CHF, GBP/USD, and USD/JPY. Scalpers prefer these pairs because they move slowly in the market and have the highest amount of trading according to volume.
What is the most powerful 1-minute scalping strategy? ›
Top 1-Minute Scalping Strategies
- Trend Following. Trend following is one of the most popular strategies. ...
- Bullish and Bearish Flags and Pennants. This strategy involves identifying an existing trend and establishing flag and pennant patterns on a 1-minute chart. ...
- Other Continuation and Reversal Patterns.
Forex scalping allows traders to make profits quickly. Since scalpers aim to capture small price movements, they can exit trades as soon as they make a profit. This means that scalpers can make several trades in a short period and accumulate profits over time.
What is the best scalping time in forex? ›
In general, most traders scalp currency pairs using a time frame between 1 and 15 minutes. Whilst there is not really a "best" time frame for scalping, the 15-minute timeframe does tend to be the least popular with most Forex scalping strategies. Both 1-minute and 5-minute timeframes are the most common.
