5min Method Trading System For MT4
Table Of Contents:
- 5min Method Trading System For MT4
- Selecting the trading instrument
- 5min Method Trading System For MT4 - Long trade setup
- 5min Method Trading System For MT4 - Short trade setup
- Trade Management
- 5min Method Trading System For MT4 - Conclusion
Please note: This strategy was publicly published in the trading community and is free to use. We do NOT make an attempt to decide if this strategy is profitable or not, because we know that the major factors regarding trading results are the skills/experience of the trader who executes the strategy. Therefore, we are mainly explaining the components and rules of the strategy. If applicable, we are highlighting advantages, disadvantages and possible improvements of the strategy.
The 5min Method Trading System For MT4 again proves that the MT4 platform is staked with the most important indicators used to develop unique strategies. This strategy uses MACD, stochastic, and 5 periods EMA variations. After loading the template for this strategy, you will notice a small channel created by the blue colored moving average. These blue lines are nothing but the variations of period EMA. Below the main chart, you should notice the regular MACD and stochastic indicator. These two indicators will be acting as the prime trade filter tools in your trade execution process. There is no reason to think that this strategy is a bit weak since you are not using any exotic indicators.
As the name suggests, 5min Method Trading System should be used to trade in the 5-minute chart only. The only reason to take the 5-minute data into account is that the period set in the EMA is relatively low. However, you should be extremely careful with the key steps mentioned in the article since a minor mistake can lead to a big loss. Regarding the use of the stochastic and the MACD indicator, we will use a different but advanced technique. Now let’s learn the process by which we should select the currency pairs to deal with the 5min Method Trading System.
Selecting the trading instrument
The overall performance of the 5min Method Trading System greatly depends on the trader’s skill and ability to select the trading instrument. Most people fail to get the best result from this indicator since they pick the wrong indicator at the wrong time. To improve your performance, start trading with the major pairs. But you should be extremely cautious about the spread. The spread must be less than 3 pips. It should be a tough job to find trending major currency pairs that have a tight spread. If you find it hard, you should change your broker and look for a premium trading service provider.
The second thing to consider is the nature of the market. If the market stays in the ranging mode, you should not use the 5min Method Trading System. Using the system to take the trades in the trending asset is the most efficient way to trade with tight SL. Lastly, you should consider the trading session. Unless you take the trades in the active trading session, it will be really hard to secure decent profit. Try to read more about the importance of a trading session and then you will know why you should open the trades in a specific asset based on trading hours. But those who don’t want to face such hassle should take trades in the EURUSD and GBPUSD pair during the London and New York trading session only.
5min Method Trading System For MT4 - Long trade setup
We have already told that 5min Method Trading System is a very powerful strategy that requires some advanced use of the MACD and regular stochastic indicator. First of all, find an asset that has an ascending slope in the 5 EMA. After spotting the ascending slope in the 5-minute chart, you should be waiting for a bullish pin bar pattern. This is the only pattern we will be used to take our long trade. Once you have spotted the bullish pin bar at the 5 EMA lower band, have a look at the MACD indicator. At the MACD indicator, you should see a fresh bar on the positive side of the reference line. The fresh bar on the positive side indicates the bulls have gained momentum.
For the final check, go to the stochastic indicator reading. In this segment, we will teach advanced ways to take the confirmation from this indicator. Before the bullish pin bar forms, the blue signal line should cross above the red signal line right at the junction of the 20 lines. If you get the bullish cross, take the long trade. The stop loss is set below the tail of the pin bar and it should never exceed 10 pips. For the take profit, set the profit target to 20 pips. And make sure the risk is not above your comfort level.
5min Method Trading System For MT4 - Short trade setup
In the long trade segment, we have seen how the regular stochastic can be used in a very advanced way. Now we will learn the advanced method to use the MACD indicator. Just like the long signal, look for the bearish pin bar at the top of the EMA band. The EMA bands should show a descending structure in the market. Once you have spotted the bearish pin bar in the EMA band, you should get the data from the MACD indicator. The red line signal line in the MACD indicator should be touching the top of the histogram on the negative side. Finally, look for the bearish cross in the stochastic indicator near the 80 levels.
After getting the confirmation from MACD and stochastic, open a new short order with a stop loss above the tail of the candlestick. The take profit will be 20 pips and the stop loss should not exceed 10 pips. For the risk factor, it is better to follow the 1% rule. Though the 5min Method Trading System can provide you very powerful trade signal, still you should be ready to embrace few losses once in a while. As long as you trade with proper money management, you will be happy with this system.
Trade Management
To manage the trades, the traders have to use a very strategic method. First of all, we recommend the traders use a trading journal while using the 5min Method Trading System. By doing so, any trader can easily track their progress and avoid losing money due to over-trading. Since the technical factors are analyzed in the 5-minute chart, the traders have to get in sync with this trading method first. So, we recommend everyone to start with the GBPUSDU and the EURUSD pair. And the risk factor for the first few months should be limited by the 1% rule.
As you feel confident with your performance, you can slowly move to different trading instruments. If the result is satisfactory, start taking the trades with 2% risk. However, you should be cautious about the overall lot size while running multiple trades. The trading lot should be determined in such a way so that if you lose all the trades, you won’t lose more than 3% of your account balance. So, we recommend the retail traders to have a maximum of 3 open positions and the risk in the trades should be strictly maintained.
5min Method Trading System For MT4 - Conclusion
Smart investors can easily learn the strategic use of the 5min Method Trading System. You might be an inexperienced trader, but by following the tips mentioned in this article, you can expect to start scalping like a pro trader. Remember the fact, the trend in the five-minute chart can change without having any influence from high impact news. So, if you see the slope of the EMA channel is gradually leveling to zero degrees, you should avoid taking the trades on that certain asset.
Making money in the Forex market is all about quality trade executions. And to execute the quality trades, the 5min Method Trading System is not enough. You need to be in control of your emotions and only then you can deal with the random outcomes from the market. Take your trades with low risk and try to focus on quality. Once you understand the fact, quality matters over quantity, you will never break the rules. And being disciplined while using the 5min Method Trading System secures an easy path to succeed in the trading business.
Download the complete system description and the files here:
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