5 minute trading system forex

I trade with the EURUSD a lot because of low spreads. I also like to trade on the 5 Minute chart. However, my system can be used in other currency pairs and timeframes as well. My system is a very simple scalping systemso anyone who has traded before will have no trouble learning to trade it because the indicators and concepts that I use in the system are very popular.

All you need to do is read carefully, watch the videos and practice trading the system. In this manual, I will explain each indicator I use in the system. I will move on to explain the techniques such as identifying divergence setups and also finding support and resistance levels. I will also show forex how to setup your chart.

After that, I will show you the system rules and give some examples of trades. How did you come up with the system you have traded during trading competition? Does your system use any custom indicators? No, I just use the RSI and CCI that are found in the MetaTrader4. Do you forex a set number of rules on each and every trade?

Yes, it is pretty set in how I do it. Are there any exceptions to your trading system rules? I use the market orders to enter trades. I enter on the close of a candle in a favourable direction when a setup occurs. What percentage of your account balance do you risk on each trade? What would be the maximum drawdown you would risk on any trade? What is the maximum number of trades that you open at one time? I would enter only one trade at a time, and maximum lot size depends on system much money 10 pips is worth, because some brokers are different in that sense.

How long will you remain in a trade once it is opened? I would keep it system however long it takes for it to hit the take profit or stop loss. How do you determine the take profit level? The take profit should be 1: Do you place a stop loss level? If so, how do you determine this level? Which signals will cause you to exit early? If price is really stalling or getting rejected, I may take my profit and run early.

Are there any particular months or weeks that you prefer not to trade and if so why? I like to take the last half of December and the first week in January off due to lack of volume.

Would you consider your system to be easily understood by beginners, or is it better suited trading intermediate or advanced level traders? I think setups are very easy to spot in my system. It would help to understand what divergence is though. Please explain how you apply this in your method? I try to find places where price may reverse, so I pay close attention to price when it is near previous levels of support and resistance or round trading ending in In this section, I will show you the different components of the system.

My system is very simple. There are two indicators, which I use to look for divergences with price, and I apply some techniques on system and resistance to identify the stop loss and take profit.

First, I will talk about the indicators I use, which are the Relative Strength System RSI and the Commodity Channel Index CCI. The Relative Strength Index is one of the famous indicators developed by J. The RSI is used for many different purposes in various trading systems system of its ability to measure the momentum of price movement. I use minute 7 period RSI as you can see below:. RSI compares the gains and losses of the market in order to show the current and historical strength or weakness of price, and plots that on a 0 to scale.

So, when price moves system, the RSI also moves up, and vice versa. Normally, the Minute is displayed with specific levels for identifying overbought 70 and oversold 30 levels. The Commodity Channel Index CCI was developed by Donald Lambert. Minute like the RSI, the CCI is a momentum oscillator. In other words, the CCI is at high system when prices are higher than usual, and it is at low levels if the prices are lower than usual.

The CCI can also be used to identify overbought or oversold, but I also use it to identify divergences for trading signals. I use the 7 period CCI for my trading system. This is the main technique I use for identifying buy and sell trade signals. Normally, the indicators I use, the RSI and CCI, follow price movements.

They go trading when the price moves up, and they go down when the price moves down. However, there are instances when the RSI and CCI are moving in an opposite direction of the price.

This is what we call divergence, and it indicates that the trend will soon change. When the price makes lower lows but the indicators are making higher lows, you have a bullish divergence. In the example to the left belowyou can see that I drew a line A to connect the lows of the SMA. I also connected the lows of the indicators B and C.

The price is making lower lows, while RSI and the CCI are making higher lows. Forex is the basis for divergence in my system, and not the candlesticks. As trading comparison, look at the second example. I applied 1 period Simple Moving Average SMA on the candlesticks. The SMA is looks exactly like the price as it forex on the line chart.

The 1 SMA and the line chart are basically the same. When looking for divergence, be careful not system use the highs and lows of the candlesticks. Instead, look for the highs and lows of the 1 period SMA or the line chart. When the indicators begin to move up, even if the price is still going down, this means that the forex is beginning to gain some momentum in the upward direction.

The current downtrend is now weak, and a new uptrend will soon take place. To identify a bullish divergence, the lines are drawn below both price and indicators, and the direction of the lines on the indicators are going up even if the price is going down.

Bearish divergence is the system opposite of bullish divergence. Here, the trading makes higher highs but the indicators are making forex lows. In the first example below, I drew a line A to connect the highs of the price. On the indicator windows, you can see that I drew lines A and B connecting the highs as well, but this forex, they are pointing down.

The price is making higher highs, while RSI and the CCI are making higher lows. A bearish divergence indicates that price is losing minute in the upward direction and beginning to gain some momentum in the downward direction. The trend will soon reverse. To identify a bearish divergence, all lines are drawn above both price and trendline, and the direction of the lines on the indicators are going down even if the price is going up.

Support and resistance levels also play an important role system my system because they can give trading a clue of whether or not the price will continue moving in a certain direction. I watch out minute these areas for opportunities to enter reversal trades. A level of support is the lowest maximum level that the price can reach. If price has reached the bottom, where it cannot move much lower, then it has hit a support level.

This happens because the security is deemed undervalued and sellers are no longer willing to sell. A level of resistance is the maximum high trading that price can reach. Price stops increasing because the security is overvalued and no buyer is willing to buy. Have a look at the image below for examples of support and resistance minute. In this section, I will show you how to setup your charts to trade my system using the MetaTrader4 platform.

I like to use the line chart, but if you would like to keep using the candlestick charts for some reasons, you can apply a 1 period Simple Moving Average to see exactly where the line appears on the line chart. Begin by opening a EURUSD 5 minute chartor any currency pair and timeframe you would like to trade. Click on the buttons for Line chart or Candlestick chart, whichever you prefer, on the task bar.

You can now change the appearance of your chart, right-click on it and select Properties. But if you want to use the white chart, select the Colors tab in the Properties dialogue box. Click on Custom Indicators in your Navigator window to view the list of indicators. The SMA 1 is an optional indicator that you can apply to your chart. I usually shift from the candlesticks to line charts, but having the SMA 1 is quite convenient. To apply, find Simple Moving Average under the indicators list in the Navigator window, and enter the following forex.

Take note, both Trading and CCI are taken from the custom indicators list of your MetaTrader4 platform. You can also get the chart template on the download page. There are no exceptions to the rules. For buy trades, the trigger minute is the candle which closes in the direction supported by the indicators. So, since lines B and were C sloping up, I looked for a bullish candle. The next candle after the low was a bullish candle, so I entered at the close of that candle at 1.

I then set the stop loss level below the recent swing low at 1. I set my take profit approximately the same distance of the entry to the stop loss level, at 1.

In 15 minutes, I got out of the trade with 8 pips of profit. The SMA was making a lower low Awhile the RSI 7 B and the CCI 7 C were making higher lows. The next candle that formed minute the lowest low was a bullish candle, so I entered the trade as soon as it closed at 1. I placed the minute loss level below the recent lowest low at 1. The price was ranging for a while, but I kept the trade open to wait for price to reach the take profit or stop loss. Eventually, the trade was closed with 18 pips of profit.

In this example, a bearish divergence occurred when the price was making a higher high as shown by line Abut the RSI 7 and the CCI 7 were making lower highs as shown on minute B and C. The trigger candle is a candle which closes in the direction supported by the trading. So, since lines B trading were C sloping down, I looked for a bearish candle. The next candle after the recent high was a bearish candle, so I entered at the close of that candle at 1.

I then set the stop loss level above the highest high at 1. Here, we have another sell trade example. SMA 1 made a higher high A but the Minute 7 and the CCI 7 were making lower highs B and C.

This is a good bearish divergence signal. The trigger forex appeared when a bearish formed. So as soon as it closed, I entered system sell trade at 1. I got out of the trade with 10 pips of profit. As you can see, my system is very simple, yet effective. You may notice that price can go much higher or lower than my targets, but I just use the system to scalp the markets. I like to be in and out forex the market quickly. My system works best when the markets are ranging.

So be careful when you see a strong trend, do not trade against it. Find friends who are also traders and talk to them about your experiences. There may minute things forex know that may help you become better at trading. The forum is a great place to start. I think that in trading, patience is very important. Do not jump in and out of trades without proper confirmation of the signals, or if you are already late.

Wait for the next signal to come because you will have a better chance of winning the new trade than the missed setup. Your email address will not be published. Leave this field empty. Advanced Trend Trading With Smoothed Heiken Ashi Candlesticks. High Accuracy Forex Trading Signals With NPFX Trend-Momentum Trading System. How to Catch Forex Profitable Trends with Momentum Trend Channel Trading Strategy.

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