Aroon Rainbow Forex Scalping Trading Strategy

For those that’ll love to skim small profits in a consistent manner during active market hours, scalping will be the right way to go.

A forex scalper scans the market for opportunities that allows for quick opening and liquidation of positions.

We have designed the Aroon Rainbow forex scalping strategy for scalpers who like to trade of the smaller timeframe’s, such as the M1, M5 or M15 chart.

Learn how it works below:

Chart Setup

MetaTrader4 Indicators: Aroon_Oscilator_v1.ex4 (Inputs Variable Modified; AroonPeriod=50), RainbowMMA_01.ex4, 12 EMA

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

Recommended Trading Sessions: London, New York, Tokyo

Currency Pairs: Any pair with low spread for maximum profits

Download

Download the Aroon Rainbow Forex Scalping Trading Strategy

Buy Trade Example

Fig. 1.0

Strategy

Long Entry Rules

Initiate a buy entry if the following indicator or chart setup gets put on display:

  1. If the dodger blue vertical lines and green line of the Aroon_Oscilator_v1 custom indicator stays above the 0.00 level as shown on Fig. 1.0, it is an indication of upward price pressures, hence a buy signal is imminent.
  2. If the medium orchid lines of the RainbowMMA_01 custom indicator intersects the red 12 EMA line in a bottom up manner as depicted on Fig. 1.0, while price trades somewhat above the lines, a bullish signal is said to be looming.

Stop Loss for Buy Entry: Place stop loss below short-term support.

Exit Strategy/Take Profit for Buy Entry

Exit or take profit if the following rules or conditions takes precedence:

  1. If the green line of the Aroon_Oscilator_v1 custom indicator breaks below the 0.00 level while a buy signal is running, it is an indication of weaning bulls powers, hence an exit or take profit is recommended.
  2. If price closes below the medium orchid lines of the RainbowMMA_01 custom indicator or of it crosses the red 12 EMA line in a top downward fashion, an exit or take profit is recommended.

Sell Entry Rules

Enter a sell order if the following holds true:

  1. If the red vertical lines and green line of the Aroon_Oscilator_v1 custom indicator break below the 0.00 level as depicted on Fig. 1.1, it is an indication of downward price pressures i.e. a trigger to sell the selected forex pair.
  2. If the medium orchid lines of the RainbowMMA_01 custom indicator intersects the red 12 EMA line in a top downward fashion as illustrated on Fig. 1.1, while price trades slightly below the lines, a bearish signal is said to be imminent.

Stop Loss for Sell Entry: Place stop loss above short-term resistance.

Exit Strategy/Take Profit for Sell Entry

Exit or take profit if the following takes center stage:

  1. If the green line of the Aroon_Oscilator_v1 custom indicator surges above the 0.00 level while a sell signal is ongoing, it is an indication of halting bears powers, as such an exit or take profit is advised.
  2. If price closes above the medium orchid lines of the RainbowMMA_01 custom indicator or if it crosses the red 12 EMA line in a bottom up manner, an exit or take profit will suffice.

Sell Trade Example

Fig. 1.1

Free Download

Download the Aroon Rainbow Forex Scalping Trading Strategy

About The Trading Indicators

The Aroon_Oscilator_v1.ex4 is a custom indicator designed by Tushar Chande and has the ability to spot the formation of a new trend as well as define the momentum of such trends.

The RainbowMMA_01.ex4 custom indicator is the first GMMA forex series of eleven technical indicators largely based on the Guppy multi moving average.

The 12 EMA is an exponential moving average that has its period set at 12 and reduces the lag by adding more weight to recent price.

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