168# Price Action Candle Scalping

Price action trading

Submit by William Trader

 

The "Price Action Scalper” is a trading strategy using4 screens – it is a no

indicators Forex strategy. It gives a good chance of profit, with proper risk

management - and the possibility of a stable income.

This universal system can be used for a very short scalping trading session as

well as for a regular day of trading longer trades. We will discuss both

methods (when to place orders, take profit, set a stop loss) for both scalping

and normal day trading.

The "Price Action Scalper” is based on a 4-screen system, and uses the H1,

M5, M15 and M30 time frames; protective stop orders including a trailing

stop, a stop loss as well as take profit levels.

In order to implement the system – all you have to do is to open (in your

trading terminal) four windows with the currency pair (for example

EUR/USD) timeframes of H1, M5, M15, M30. If you choose "Vertical" in the

"Window" menu Metatrader 4 four screens in the terminal will be placed in

adjacent windows in order.


How it works:

The “Price Action Scalper” system based on a strong current trend

confirmation entry signal which is very easy to see on your trading terminal –

4 windows. You will get a signal once per hour (every hour). To use this

system you don’t need to sit and watch the market all the time – just get ready

at the last minute of the current hour – if there is a signal – place a trade, if

not – you are free again for the next 59 minutes until the next trading

opportunity. Simple and convenient!

BUY entry:

- Wait for a current hour candle to close

- If all 4 of the last candles (M5, M15, M30 and 1H) closed in “green” – wait

for the price to go another 3 pips above the close and instantly place a BUY

order.

From the screenshot :

1. On 1H chart - a 9:00 candle closed green at 10:00.

2. On M30 chart – a 9:30 candle closed green at 10:00

3. On M15 chart – a 9:45 candle closed green at 10:00

4. On M5 chart – a 9:55 candle closed green at 10:00

 

5. The price goes another 3 pips above the close.

If all the above conditions met – place a BUY order at current price:

 

 

In the picture Price action candle scalping system in action.

An opposite rule for a SELL entry.

SELL entry:

- Wait for a current hour candle to close

- If all 4 last candles (M5M15M30 and 1H) closed in “red” – wait for the

price to go another 3 pips below the close and instantly place a SELL order.

For example:

1. On 1H chart - an 11:00 candle closed red at 12:00.

2. On M30 chart – an 11:30 candle closed red at 12:00

3. On M15 chart – an 11:45 candle closed red at 12:00

4. On M5 chart – an 11:55 candle closed red at 12:00

5. The price goes another 3 pips below the close.

If all the above conditions have been met – place a SELL order at the current

price!

This example is, of course, perfect. In reality, a candle, say, M15 may be closed

green. In this case, other candles being red, we will have to wait for the next

candle.

 

 

STOP LOSS and TAKE PROFIT

3 options

1. Place a fixed stop loss at 2 pips below the low of the previous 1 hour candle

for a buy trade or 2 pips above the high of the previous 1 hours candle for a sell

trade. This is the best option for a short term scalping trade.

When the price reaches 15 pips – stop loss is transferred to breakeven.

Depending on your trading preferences, you can resort to the trailing stop.

3. Place your stop loss order near the major highs/lows – major support and

resistance levels. The “Price Action Scalper” system can be successful only by

strict compliance with the rules. Take-profit should always be 2-3 times

greater than the stop loss.

Place a fixed take profit at 30-40 pips away from your entry point.

 

 

 

Share your opinion, can help everyone to understand the forex strategy.

Write a comment

Comments: 2
  • #1

    Deedou (Wednesday, 14 August 2013 06:33)

    What are you doing if you are having an opposite signal (all candles are showing the same direction when you are already in a trade) ?

    Are you closing the actual trade and enter the new trade ?
    Do you forget and continue your trade until it reaches or the TP/SL ?

  • #2

    Brad Alexander (Tuesday, 17 September 2013 12:39)

    Hi William
    I am demo-ing your strategy now and have a couple of questions. Have you tried using any indicators for trends? Do you find this strategy works better during certain times of the day? I am finding that the London session is too volatile but the New York session seems to be giving me better results.
    Also, in your example, when you say "wait for the next candle" on the m15, do you mean the next m15 candle or H1 candle?
    Thanks