After Hours Forex Scalping Strategy

The After Hours forex scalping strategy is designed to help currency traders take full advantage of the decreased volatility in the market during these sessions.

The buying and selling of currency pairs after specific trading hours or during “After Hours” (4:00 pm and 8:00 pm EST) holds a huge profit potential for scalpers.

It is interesting to understand how this concept plays out with the examples under listed.

Chart Setup

MetaTrader4 Indicators: Volatility.ex4 (default setting), Holt_double_exponential_smoothing_2.2.ex4 (Input Variable modified; Estimate period=28.66)

Preferred Time Frame(s): 1-Minute, 5-Minute, 15-Minute

Recommended Trading Sessions: Any

Currency Pairs: Any pair

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Buy Trade Example

Fig. 1.0

Strategy

Long Entry Rules

Initiate a buy order if the rules or conditions takes precedence on the activity chart:

  1. Wait for “After Hours” session (4:00 pm and 8:00 pm EST) to kick in, which is 11pm – 3am on my broker’s server. If the 1min candlestick closes bullish, it indicates a bullish sentiment in the market i.e. a buy trigger. You can also confirm this on the 5min and 15min chart.
  2. If the line of the Holt_double_exponential_smoothing_2.2 custom indicator is painted lime green as shown on Fig. 1.0, price is said to be driven higher i.e. a buy trigger.
  3. If the histograms on the volatility indicator declines, it is an indication that the market is entering a period of thin volatility, thus reducing the chances of being whipsawed in the market whilst scalping.

Stop Loss for Buy Entry: Place stop loss 3 pips below support.

Exit Strategy/Take Profit for Buy Entry

Exit or take profit if the following holds true:

  1. If the line of the Holt_double_exponential_smoothing_2.2 custom indicator turns orange, it is pointing to a possible reversal, hence an exit or take profit is recommended.
  2. If the histogram of the Volatility indicator spikes abruptly, it is signaling sudden increasing volatility which could result to a whipsaw, hence a trigger to exit or take profit at once.

Sell Entry Rules

Enter a sell in the market if the following chart or indicator pattern gets displayed:

  1. Wait for “After Hours” session (4:00 pm and 8:00 pm EST) to kick in, which is 11pm – 3am on my broker’s server. If the 1min candlestick closes bearish, it indicates that price is being driven lower i.e. a sell trigger. You can also verify if price closed below it open on the 5min and 15min chart.
  2. If the line of the Holt_double_exponential_smoothing_2.2 custom indicator is painted orange as seen on Fig. 1.1, price is said to be pushed lower i.e. a sell trigger.
  3. If the histograms on the volatility indicator declines, it is an indication that the market is entering a period of thin volatility, thus reducing the chances of being whipsawed in the market whilst scalping.

Stop Loss for Sell Entry: Place stop loss 3 pips above resistance.

Exit Strategy/Take Profit for Sell Entry

Exit or take profit if the following holds sway:

  1. If the line of the Holt_double_exponential_smoothing_2.2 custom indicator turns lime green during a sell signal, it is pointing to a possible reversal, hence an exit or take profit is recommended.
  2. If the histogram of the Volatility indicator spikes abruptly, it is signaling sudden increasing volatility which could result to a whipsaw, hence a trigger to exit or take profit immediately.

Sell Trade Example

Fig. 1.1

Free Download

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About The Trading Indicators

The Holt_double_exponential_smoothing_2.2 is a trend following indicator that is essentially used for forecasting but not as an average. It uses linear forecasting in carrying out its forecasting method.

The Volatility indicator is a simple technical tool that gauges the volatility or a particular currency pair available on the trade terminal.

After-hours trading (AHT) refers to the buying and selling of currency pairs between 4:00 pm and 8:00 pm EST, usually after the specified regular trading hour.

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