Scalping with Grucha Channel Strategy For MT4
The Scalping with Grucha Channel Strategy For MT4 looks a bit different from the name. You might be thinking that this has to do with some channel indicator. However, there are no channels and the price chart is relatively clean as well.
What you do have is the Bollinger Band modified oscillator. This indicator sits in the sub window. What it does is that it plots green, yellow and red bars. These basically indicate when there is a contraction and when there is an expansion in the Bollinger band.
Based on the slope of the Bollinger band, the modified Bollinger band indicator also plots the red or green bars in the direction of the slope of the Bollinger band. This indicator basically allows a rather unique view of the Bollinger band indicator. Traders can trade based of this indicator primarily.
Beside the modified Bollinger band indicator, there is also the goldminer oscillator that sits at the very bottom. This indicator is used to measure the strength of the trend. When the trends are strong, the goldminer oscillator will continuously plot red of blue bars.
What is clearly lacking in the Grucha scalping strategy is any clear directions on how to trade. Therefore, the average trader might find it a bit intimidating to trade the Grucha scalping method. Beginners should certainly stay away from the Grucha scalping indicator for the very reasons mentioned.
On the flipside however, this system is open to interpretation. This means that traders could potentially create their own trading rules and come up with their own customized version of the Grucha trading system. But let’s take a look at one of the ways you can trade forex with the Grucha scalping system.
Grucha Channel Scalping trading system – Long positions
To take long positions, the first thing we need is to start by looking at the two oscillators. There are many different combinations of the goldminer and the modified Bollinger band oscillator. But for simplicity’s sake, we will use the method where we have the Bollinger band modified oscillator to turn yellow.
This basically tells you that the market is in a Bollinger band squeeze. A Bollinger band squeeze occurs when the bands contract. When this happens, it typically represents a flat market with no range. Quite often, you will see prices trading sideways. You can also see this in the above chart example for a long position.
Once this is in place, the next step is to look to the goldminer oscillator. We want the goldminer oscillator to turn blue. When this indicator turns blue, it potentially suggests that the uptrend is strong. When both these conditions are met, wait for the open of the next candlestick session and then go long.
Place your stop loss at or below the recent pivot lows on the price chart. For take profit, you can use either a fixed risk to reward ratio set up, or simply book profits at key price levels. For example, you could use the round numbers to book your profits. Alternately, if you are proficient with technical support and resistance levels, then you could apply that to the Grucha scalping method.
Using this approach, you can book your take profit on different strategies or tactics.
Grucha Channel Scalping trading system – Short positions
The setup for short positions using the Grucha channel scalping trading system is to wait for price to firstly trend higher. Following this, we need to see evidence of the Bollinger band modified oscillator to either turn yellow or red.
This basically indicates a consolidation or the Bollinger band squeeze. Of course, at this point, we still don’t know if the price will reverse and move lower or if it will continue its previous trend and push higher. Therefore, we look to the goldminer oscillator.
Ideally, we want to see red bars forming on the goldminer oscillator. This will suggest that the downtrend is strong. Thus, when the Bollinger band also turns red in this example, we take a short trade.
Wait for the open of the next candlestick and then go short. You can set your stop loss near the recent highs that formed prior to you taking the short entry. After this, you can set your take profit to a favorable risk to reward ratio.
As mentioned in the set up of the long trade example, you can use different approaches. Besides the ones mentioned in the long example, you could use other methods such as booking profits when the goldminer oscillator turns blue again. But note that the oscillator will turn blue even on small retracements in price.
Thus, if you follow this method you might end up closing your trade a bit too prematurely. But on the other hand, if the trend is very strong, then the goldminer indicator will continue to plot red bars. This is good as it allows you to completely ride the trend and make strong profits as a result.
Is the Scalping with Grucha Channel Strategy For MT4 good for trading?
The Grucha channel scalping trading system gets mixed reviews. In some ways it feels like this trading system is rather incomplete. But having said that the Grucha channel scalping trading system is quite open and traders who wish to develop their own trading strategies can do that with the Grucha channel scalping trading system.
The Grucha channel scalping trading system can be traded on both short term and long term charts. So some swing traders might be able to explore the options available with this trading system. But the lack of any further indicators, especially on the price chart leaves a lot to be desired. As we mentioned earlier, the Grucha channel scalping trading system is not suited for beginners.
Unless the trader is well versed in various concepts of technical analysis and money management, it might get difficult to trade using the Grucha channel scalping trading system. Still, for all its shortcomings, the Grucha channel scalping trading system is a fairly ok trading system.
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