Forex Scalping With SMA and Stochastics Expert Advisor For MT4
WE IMPROVED THIS EXPERT ADVISOR FOR YOU!!!
PLEASE NOTE: This expert advisor was publicly available for free usage on other websites and is not programmed by us. We explain the functionality and possible improvements of the EA. Furthermore, we are convinced that fully automatic Expert Advisors will fail in the long run. On the other hand, our semi-automatic approach with detecting the best setups and then activating our Expert Advisors (e.g. V-Power EA, EdgeZone EA) produced many successful traders and some of them even got prop traders at prop trading firms. Therefore, we added a similar semi-automatic trading feature (to allow only buy or only sell trades) to the free Expert Advisors. You can download the modified version here and enjoy!
Table Of Contents:
- Forex Scalping With SMA and Stochastics Expert Advisor For MT4
- Overview of Forex Scalping With SMA and Stochastics Expert Advisor For MT4
- Forex Scalping With SMA and Stochastics Expert Advisor For MT4 - Entry Signals
- Realiability of the Forex Scalping With SMA and Stochastics Expert Advisor For MT4
Scalping is one of the most popular strategies in Forex trading as it creates numerous opportunities within a day and has a potential to give impressively high returns.Most scalpers use high volumes and target to gain or lose less than 10 pips per trade.Such kind of trading calls for lightning speed reaction, clear judgement and stable emotions. One needs to close a trade strictly at the desired profit, or jump out of a losing trade fast enough without getting emotional.
This comes with pressure, mental burnout and even stress especially if one lacks full mastery of strategy, high discipline and emotional stability.Low concentration can easily throw a trader into panic and eventually lead to loss of money.While this is not desired, it is almost impossible for a human mind to withstand such kind of pressure, hence the reason over 90% of traders still lose their money. Forex scalping with SMA and stochastic Expert Advisor for Mt4 comes to solve these problems by providing a simple but effective scalping system.
Overview of Forex Scalping With SMA and Stochastics Expert Advisor For MT4
As the name suggests, Forex Scalping With SMA and Stochastics Expert Advisor relies on signals from the stochastic indicator and a crossover of the 21 day exponential moving average and 200 day simple moving average to take take trades. See the inputs in the above picture. We have an up trend whenever the 21 period EMA is above the 200 EMA,and a down-trend when the reverse happens.
SMA 200 is the anchor line for the direction of the trend while EMA 21 confirms the strength of the trend. The stochastic indicator is used as a confirmation tool before a trade is entered. By default it comes with the chartered original stochastic oscillator optimized to period 5 %K which simply means that it considers the most recent close of the highest high over the last period of 5 units (could be days, hours, or even minutes)and the lowest low over the past 5 periods. The optimal value for %D is 3, a signal line reflection of the three-day simple moving average of %K. It’s necessary to consider smaller periods while scalping because you want to catch any changes in price as soon as possible and be able to make money out of them.
A cross-over of these two lines %K and signal line %D is a strong indication of an approaching shift in market sentiment and consequently a change in the direction of the trend.For example, an upward cross of the signal line is an indication that the most recent closing price of bars within the selected period is nearer to highest high that it has been in the previous three sessions.
Forex Scalping With SMA and Stochastics Expert Advisor For MT4 - Entry Signals
Forex Scalping With SMA and Stochastics Expert Advisor has a simple rule; always make the trend your friend This Expert Advisor will use the following criteria when looking to enter into a trade.
- Check the relationship between exponential moving average and simple moving average- to find out if the trend is bullish or bearish
- Check the behaviour of stochastic oscillator
- Compare both signals from the two indicators.
- Check the opening price of the current new bar.
- Take a trade in the right direction after confirming that the two indicators have given a similar signal
Forex Scalping With SMA and Stochastics Expert Advisor will only take buy trades on a bullish trend. The above picture shows a GBPUSD 1 hour candlestick chart. EMA 21, represented by the aqua line, is above SMA 200, which is the red line in the above chart. We can also see that the signal line of stochastic is pointing up, indicating a change of market direction from bearish to a bullish trend. The price of the current new bar must have opened above SMA 200. If these three factors are in confluence, Forex Scalping With SMA and Stochastics Expert Advisor will take a buy trade, and set a stoploss to protect your trade.
Forex Scalping With SMA and Stochastics Expert Advisor will only send sell orders to the market when there is a clear confirmation of a bearish trend, as seen on the chart above. This is a 1 hour GBPJPY chart. Signal marked “A” is a false and incomplete signal. The moving averages have given us a go ahead to take a short, but the stochastic oscillator indicates that price might be going up.Eventually the we saw a bullish retracement before price finally dipped.
If a scalper was to take this trade, it would surely have resulted into a loss. This is why we need a combination of different factors before committing out money into a trade. Signal labelled “B” is right.EMA 21 has just crossed below the anchor line, which is SMA 200, red line, giving us an indication of a bearish trend. We might want to see a trade as soon as this happens, but it is necessary to add filters so as take care of our capital by avoiding false signals.In that case the new open bar must have opened at price below SMA200.
The Expert Advisor will at this point check whether these signals blend with that of the stochastic indicator. If they do, we will have a new open short trade; if they do not, the EA will wait for the right confirmation.In the above chart, signal labelled “B” was a perfect sell.
Realiability of the Forex Scalping With SMA and Stochastics Expert Advisor For MT4
The uniqueness of Forex Scalping With SMA and Stochastics Expert Advisor lies in its simmpleness. Success is always found in simplicity. In most cases, complex Forex Trading systems fail. You need to trade with a strategy that is easy to comprehend and can be adjusted fast enough to put you back to profitability whenever necessary.
I would also recommend this EA because its a perfect intra day strategy that leaves no open trades at the end of the day. Going to bed with open trades can be a major reason for developing insomnia. This system gives you the luxury of always ending your day with a clear picture of your returns, and the assurance that your money is safe.
Any trader would surely want this. Besides, the fact that this system scalps along the trend guarantees that you will collect pips along the entire trend whenever price rallies in any direction. Additionally, smaller periods used to calculate the values of stochastic increase its sensitivity to price changes making it possible to catch profitable trades even on slow days.
Worth Noting: We have already mentioned that you need to have lightning speed when scalping because every pip counts. Your choice of broker will play a major role in determining the level of success that you can achieve with this system. Too many re-quotes, unnecessary slippage and a generally slow platform will have you lose out on some pips that could have contributed to your profits. It goes goes without saying that your internet speed must also be good enough to support your money making venture.
You may get Forex Scalping With SMA and Stochastics Expert Advisor For MT4 by clicking on the link below. Happy Trading!