Cutting Points Strategy

Cutting Points Strategy

15 November 2017, 23:19
Dragan Drenjanin
0
31

Strategy “Cutting Points”

Recommended timeframes M5

We offer for your consideration one of the speculative strategies on the Forex market. This is a scalping strategy and it is recommended to be used on the calm market when the price chart is moving in a sideways channel. It is also worth noting that low spread and fast order execution are also necessary conditions for the strategy to work.

Instruments: major instruments with low spread such as EUR/USD, GBP/USD, AUD/USD, USD/CAD (instruments may vary depending on the spread offered by your broker).

Timeframe: M5.

Indicators used:

  1. Bollinger Bands (20, 2);
  2. ADX  (14 period);
  3. RSI (7 period).

When to buy:

gbpusd m5

  1. The price is below or on the lower MA of Bollinger Bands;
  2. The RSI is below the 30 mark;
  3. The ADX is below the 30 mark;
  4. Open long positions when the price returns above the lower MA of Bollinger Bands..

When to sell:

gbpusd

  1. The price is on or above the upper MA of Bollinger Bands;
  2. The RSI is above the 70 mark;
  3. The ADX is below the 30 mark;
  4. Open short positions when the price returns below the upper MA of Bollinger Bands.

When to exit:

  1. TP on the middle MA of Bollinger Bands;
  2. Quick TP 3-5 points away from the opening level;
  3. SL 3 points above/below the lower/upper MA of Bollinger Bands.

It is not recommended to trade 30 mins prior to macroeconomic news releases. The condition that the RSI > 70 or < 30 is not compulsory. The most important in this strategy is to determine the right moment for trading when the price remains in the sideway range. 

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