Initially this strategy was designed for the EUR/USD but itcan be tested with other currency pairs or even other types of assets.
- 1 candlestick chart of 1 minute.
- Bollinger Bands fixed in 18, exponencial.
- Relative Strench Index (RSI) in 14.
- MACD Histogram (default configuration).
- 1 Exponencial Moving Average (EMA) of 3 periods fixed at close.
Trading System Rules
- The EMA 3 must cross through the midline of the Bollinger Bands 18.
- At the same time the RSI and the MACD Histogram must be above 0 (MACD) and above 50 (RSI) as a buy signal. Conversely, if the MACD is below 0 and the RSI is below 50 the trader should open a short position. As you see the rules are very simple.
- Is very important to remember to take small profits. This a scalping trading technique, so it is no designed to take big movements.
- It is advisable to practice this trading strategy in a demo account before trading with real money.
Additional considerations with respect to the system
In the 1 minute charts the movements are very fast. This is a scalping trading technique. If scalping is not your style of trading, you can try other combinations of moving average in the same 1 minute chart that best suit your way you trade in the market:
- EMA 7 and Bollinger Bands with a middle line of 18 periods.
- EMA 5 and Bollinger Bands with a middle line of 20 periods.
- EMA 10 and Bollinger Bands with a middle line of 20 periods.