Let’s discuss a profitable scalping strategy that uses three indicators on TradingView. The three indicators are Trader XO macro Trend scanner, MACD, and Moving Average Exponential.
The Trader XO Indicator
The Trader XO indicator gives buy and sell signals based on the crossing of two moving average lines. The default settings for the Trader XO indicator are:
- Fast Moving Average: 20
- Slow Moving Average: 50
- Signal Line: 10
When the fast-moving average crosses above the slow-moving average, it is a buy signal.
The MACD Indicator
The MACD indicator is used to filter out fake signals from the Trader XO indicator. The MACD indicator consists of two lines: the MACD line and the signal line. The MACD line is calculated by subtracting the 26-day exponential moving average from the 12-day exponential moving average. The signal line is a 9-day exponential moving average of the MACD line.
When the MACD line crosses above the signal line, it is a buy signal. When the MACD line crosses below the signal line, it is a sell signal.
The Moving Average Exponential Indicator
The Moving Average Exponential indicator is used to confirm the trend of the market. The Moving Average Exponential indicator is a moving average that gives more weight to recent prices. The default setting for the Moving Average Exponential indicator is 20.
When the price is above the Moving Average Exponential line, it is an uptrend. When the price is below the Moving Average Exponential line, it is a downtrend.
How to Use This Scalping Strategy
To enter a trade using this strategy, you need to get a signal from the Trader XO indicator, the MACD histogram needs to be in the correct direction, and the price needs to be above/below the Moving Average Exponential line.
Here are the specific rules for entering a long trade:
- The Trader XO indicator needs to give a buy signal.
- The MACD histogram needs to be above the zero line.
- The price needs to be above the Moving Average Exponential line.
Here are the specific rules for entering a short trade:
- The Trader XO indicator needs to give a sell signal.
- The MACD histogram needs to be below the zero line.
- The price needs to be below the Moving Average Exponential line.
Exit Rules
There are no specific exit rules for this strategy. You can exit a trade when you have reached your profit target, or when you see a reversal signal.
Backtesting the Strategy
I have backtested this strategy on the EUR/USD and GBP/USD currency pairs using 1-minute data. The results are as follows:
- EUR/USD: Profit factor of 2.0
- GBP/USD: Profit factor of 1.8
Conclusion
This is a profitable scalping strategy that can be used to make money in the forex market. However, it is important to note that this strategy is not without risk. You can lose money if you do not follow the rules of the strategy.
Disclaimer
This blog post is for informational purposes only and should not be considered financial advice. Please consult with a financial professional before making any investment decisions.
Additional Notes
- This strategy is best suited for trading in volatile markets.
- You need to have a good understanding of technical analysis to use this strategy effectively.
- It is important to practice this strategy on a demo account before trading with real money.
I would also like to add that this strategy is not suitable for everyone. It is a high-risk strategy that requires a lot of discipline and patience. If you are not comfortable with taking risks, then this strategy is not for you.
Here are some additional tips for using this strategy:
- Start with a small account size.
- Do not risk more than 2% of your account on any one trade.
- Be patient and wait for the right setups.
- Do not over-trade.
- Cut your losses short and let your profits run.
If you follow these tips, you can increase your chances of success with this strategy.
I hope this blog post has been helpful. If you have any questions, please feel free to leave a comment below.