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GBPUSD trading, scalping system

The GBPUSD currency pair is the 3rd most traded pair, after EURUSD and USDJPY. The GBPUSD is unique because it trades at a higher multiple to the USD compared to most major pairs and crosses. Because it trades at a higher price the daily moves are much higher. There is some correlation to the EURUSD, however, the GBPUSD’s moves are in 95% of the time greater than the EURUSD.

Today I present you a scalping system to be used on GBPUSD on the 5 min time frame

With this Forex scalping we can expect to make at least 5 pips per trade. It might not sound like much but since this is a scalping system we can expect to do many trades per day/week. To be successful with this system do yourself a favor and don't use a broker with a spread of over 2.5-3 pips.

 

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The trade screen setup:

Time frame: 5 minute candle chart

Indicators:

MACD (5, 8, 9)  and SAR on MACD (0.1, 0.11)  - Download this indicator here – SAR on MACD indicator for MT4 (right click save-as)

SAR on the chart (0.1, 0.11) – this is a standart MT4 indicator in MT4 use the Parabolic indicator

GBPUSD_Sar_ScalpingSystem

Trading rules

Trade only from 7:30 am to 11:30 am EST Tuesday to Friday. This is during the NY sessions and we skip Monday as it usually has less volatility.

Buy signal

When both SARs are showing upward bias then we enter with 1 order and we are only targeting 5 pips most times. This could be adjusted as you get more familiarized with this system.

Sell Signal

When both SARs are showing downward bias then we enter with a sell order.

Stop Loss

The stop loss is to be placed on the next to last SAR dot on the chart. If there is only 1 dot on the chart then set the stop at that dot.

Take Profits

  1. You can take profit at 5 pips
  1. Use a trailing type of stop moving the stop always to the second nearest SAR dot
  1. If an opposite signal appears then close the trade(both SARs change direction)

More about exits:

Why the second SAR dot why not 1st or 3rd? Very often the first SAR dot can be hit, but the second will hold.

Fine tuning the system.

Set up the same system on a 1 minute chart and once you get a signal on the 5 minute go to the 1 minute and wait for a confirmation there, if you don’t get a confirmation then skip the trade or enter with less lots.




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