Scalping with Envelopes Strategy For MT4

Scalping with Envelopes Strategy For MT4

The Scalping with Envelopes Strategy For MT4 is a very simple strategy that makes use of the envelopes indicator. This is one of the default technical indicators that you get with the MT4 trading platform. Besides the envelopes indicator there is the arrow buy sell indicator as well.

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As the name suggests, the arrow buy sell indicator plots the up and down arrows on the price chart. The trick is in identifying the down arrows when price is trading near the upper envelope line or to look for up pointing arrows when price is trading near the lower envelope channel.

Due to the use of the envelope indicator, it safe to suffice that this is a trend following trading system. Furthermore, there are no limitations on what time frames you can use this trading system on. As a result, it makes the envelopes forex trading strategy an open system that can be used for either short term scalping using the intraday charts, or it can also be used on the long term charts as well.

Although the scalping with envelopes forex trading strategy looks simple enough to trade, there is a lot to be desired. This means that traders can experiment with the scalping with envelopes forex trading strategy using other indicators. One such method is to look at the oscillator as well. By using a stochastics oscillator or an RSI or a MACD for that matter, you can time the entry of your trades. This will greatly allow you to pick the turning points in the price.

Additionally, if you add in the pivot points for example, you can also use these levels as potential take profit levels. It is up to the trader to understand what works for them. This scalping with envelopes forex trading strategy can be called a bare bones trading strategy. After you get familiar in using this trading system, you can then build upon it by adding the additional indicators that we mentioned previously.

Traders can also use the scalping with envelopes forex trading strategy as a swing trading system. But this would mean having to customize the scalping with envelopes forex trading strategy with additional moving averages and some oscillators in order to make it a good swing trading system.

For the sake of clarity, in this article, we will look at the scalping with envelopes forex trading strategy as is.

Scalping with envelopes forex trading strategy – Long positions




Taking long positions using the scalping with envelopes forex trading strategy is easy. In a nutshell, you simply wait for the up pointing arrow to appear near the lower end of the envelope channel indicator.

In some cases, it is worth noting the slope of the envelopes indicator. Ideally, we should be seeing an upward slope in the indicator. This suggests that price is making consistent highs and this increases the probability of price moving in the same direction to the upside. Note that at times you will see price moving below the lower end of the envelope channel.

This is alright, but you should make sure that the subsequent signals that appear when price is approaching the lower end of the channel is also pointing in the same direction. When you see such a signal, take a long position in the market.

To set your stop loss, look to the recent low point from the last five candlesticks. With your stop loss now being set, the next step is to set the take profit level to the upper envelopes indicator. You might want to move your stop loss to break even when price moves halfway through the envelopes indicator.

During periods of extreme trends, the envelopes indicator might also breakout above the upper end as well. Therefore, it is recommended to split your positions so that you can take advantage of the extreme price trends.

Scalping with envelopes forex trading strategy – Short positions




For short positions using the scalping with envelopes forex trading strategy is easy you simply wait for the down pointing arrow to appear near the upper end of the envelope channel indicator.

In some cases, it is worth noting the slope of the envelopes indicator. Ideally, we should be seeing a downward slope in the indicator. This suggests that price is making consistent lows and it increases the probability of price moving in the same direction to the downside. Note that at times you will see price moving beyond the upper end of the envelope channel.

This is alright, but you should make sure that the subsequent signals that appear when price is approaching the upper end of the channel is also pointing in the same direction, which is down. When you see such a signal, take a short position in the market.

To set your stop loss, look to the recent high point from the last five candlesticks. With your stop loss now being set, the next step is to set the take profit level to the lower envelopes indicator. You might want to move your stop loss to break even when price moves halfway through the envelopes indicator.

During periods of extreme trends, the envelopes indicator might also breakout above the lower end as well. Therefore, it is recommended to split your positions so that you can take advantage of the extreme price trends.

Is the scalping with envelopes forex trading strategy good for you?


The scalping with envelopes forex trading strategy as outlined in this article is a simple trading system. While we have outlined the rules of buying and selling, bear in mind that it is highly subjective. Therefore, beginners should spend a lot of time practicing on a demo account with this trading system before going live.

The scalping with envelopes forex trading strategy is also open to modifications. In some ways we feel that this trading system is a bit incomplete. Therefore, it is up to the trader’s discretion to use additional indicators in this trading system such as oscillators and moving averages to better fine tune the signals.

Download the complete system description and the files here:

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