Trend Line Forex Scalping Strategy

The Trend Line forex scalping strategy provides you with the best possible buy and sell entries in the overall direction of the trend.

The strategy consists of trend lines, the stochastic oscillator and a buy and sell forex signals indicator.

It’s a great strategy for scalping currency pairs with great precision. Let’s get started:

Chart Setup

MetaTrader4 Indicators: Stochastic Oscillator.ex4 (Input Variable modified; %K period=35),  BykovTrend_Sig.ex4 (default settings)

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

Recommended Trading Sessions: London, New York, Tokyo

Currency Pairs: pairs with4 pips maximum spread

Download

Download the Trend Line Forex Scalping Strategy

Buy Trade Example

Fig. 1.0

Strategy

Long Entry Rules

Initiate a buy order if the following indicator or chart pattern gets displayed:

  1. If price breaks above the Trend Line (blue line seen on Fig. 1.0) drawn on the lower highs on the activity chart, price is said to pushing to the upside, hence a trigger to go long on the designated currency pair.
  2. If the dodger blue upward pointing arrow of the BykovTrend_Sig.ex4 custom indicator forms somewhat below the candlesticks as illustrated on Fig. 1.0. It is a signal to buy the selected currency pair.
  3. If the lines of the Stochastic custom indicator cuts above the oversold region (below the 20.00 signal level), it is a signal to go long on positions of interest.

Stop Loss for Buy Entry: Place stop loss 2 pips below immediate support.

Exit Strategy/Take Profit for Buy Entry

Exit or take profit if the following holds true:

  1. If price breaks below the trend line after indicating a bullish trend, it is suitable to exit or take profit at such point.
  2. If the BykovTrend_Sig.ex4 custom indicator forms a red downward pointing arrow that is placed somewhat above the candlesticks, an exit or take profit is recommended.
  3. If the fast line of the Stochastic indicator (%K) breaks below the overbought region (above the 80.00 signal level), a bullish reversal is said to be underway, hence an exit or take profit is advised.

Sell Entry Rules

Enter a sell in the market if the following rules or conditions are in place:

  1. If price breaks below the Trend Line (blue line seen on Fig. 1.1) drawn on the higher lows on the activity chart, price is said to pushing to the downside, hence a trigger to go short on the selected currency pair.
  2. If the red downward pointing arrow of the BykovTrend_Sig.ex4 custom indicator forms somewhat above the candlesticks as depicted on Fig. 1.1, it is a trigger to go short.
  3. If the lines of the Stochastic custom indicator cuts below the overbought region (below the 80.00 signal level), it is a trigger to sell the asset of focus.

Stop Loss for Sell Entry: Place stop loss 2 pips above immediate resistance.

Exit Strategy/Take Profit for Sell Entry

  1. If price breaks above the trend line after triggering a bearish trend, it is advisable to exit or take profit straightaway.
  2. If the BykovTrend_Sig.ex4 custom indicator forms a dodger blue upward pointing arrow that is placed somewhat below the candlesticks, an exit or take profit is recommended.
  3. If the fast line of the Stochastic indicator (%K) breaks above the oversold region (above the 20.00 signal level), a bearish reversal is said to be underway, hence an exit or take profit is advised.

Sell Trade Example

Fig. 1.1

Free Download

Download the Trend Line Forex Scalping Strategy

About The Trading Indicators

The Stochastic Indicator is a momentum oscillator that is attributed to George Lane.

The indicator is made up of two lines, the %K fast line and the %D slow line, while it oscillates between 1 and 100.

Essentially, the Stochastic gauges the relationship between an assets closing price and its price range over a specified time period.

A trend line is a negative or positive slope that is formed by connecting two or more high or low points respectively.

The BykovTrend_Sig.ex4 custom indicator is a technical analysis tool that gauges trend with the use of an upward pointing dodger blue and downward pointing red arrows.

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