today we will talk about another fiveminutes scalping strategy with a really nice risk rewards ratio hello, traderswelcome back to my channel, my name is Liam from StayGreen.
I've seen thatrecently a lot of non-subscribers watching my video learning new tradingsystem, so if you are non-subscriber please subscribe and hit the bellbutton so you will not skip any trading strategy that I'll introduce in the future, there's one thing I want to talk about before we jump into the system, you know allstrategy that I introduce in my channel they are given away for free with theeducational and nonprofit purpose so if you come across any channel and theonline and the offline trading course and if they're using the systems to take benefitplease report that to the public and let everyone know about their unethicalbehavior of taking advantage of something I share with you on StayGreen channel for free you know one strategy doesn't generatethe same result for all currency pair due to the criteria of the strategyitself, from the entry to exit and liquidity of the currency pair.
That's noexception for this strategy for scalping in general and this strategy in specificwe all look for currency pair that has a high liquidity because that's perfectenvironment for scalping strategies on screen is 18 currency pairs that Irecommend to use for this strategy in specific and scalping in general, accordingto a market report they are 18 currency pairs that has a highest trade volume andhigh liquidity and we only use this system to trade on those currency pairsonly okay let's jump into price chart and get everything ready for the strategy.
What currency pairs should we choose for today's strategy, let's pick thefamous one, shall we EURUSD five minute time framecandlestick just give me a second to set up the.
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make it clear, let's eliminatethe grids to make the candle more visible alright guys for this system we use twoindicators one is EMA, and one is stochastic let's get the MA, for the setting for EMAwe use 200 period.
Shift, just leave it with default with a zero, MA method isexponential and Apply to close EMA ready let's get another one stochastic okay stochastic setting will be 14 for Kperiod; for D period and Slowing we leave it as default, now the idea of thisstrategy very simple with two steps, first of all, we only look to go long if theprice goes above EMA and on opposite we only look to go short if the price goesbelow the EMA and once we finish the first step, we check the stochastic, we'll go long where the price going to the Oversold area, I will go short whenprice go to the overbought, now you may see the idea is very simple but it isridiculously profitable strategy now we're going to detail on the price chartto find example and to find the entry and how to manage the trade we will take this period as sample, as you can see, this price stay above the 200 EMA, okaystep one confirmed, now we'll take a look at the stochastic and see if there isany oversold / overbought, so here we have oversold, oversold also, I'll just, okay so thisis uptrend so one of the way to improve the winning rate for this strategy is, you know “trend is friend” so we stay with the trend, we only look to go longand we can see that price enter the Oversold area in here in here and inhere, so those will be our entries for this period, so here's the idea for theentry, so when the price hit oversold area of the stochastic and show theindication that the line is going back up we enter the trade in here look back tothe chart for this case you can see that the candle that create the lower low that entered the oversold area is the bearish candle with very long lowershadow or you “wick”, lower wick, after that we have a cupof bullish candle, I'll use the vertical line to mark the bullish candle so youcan see exactly where it is on the stochastic so it's around here whichgive you a sight that the market, that the price has an indication of going back upso in this case we already know the price that entered the oversold, and has theindication of going back up and with the confirmation of the several bullishcandles after the bearish with the really long lower shadow, if you're big fan of priceaction, that candle shows the rejection right? let me delete everything and wewill focus on the entry and stop-loss and take profit, let me mark thearea and zoom in a little bit to make it easier okay so on 5-minute chart, one the priceclose at this candle, that would be our entry point, so now we have entry point, for stop-loss you may set 10 to 15 pips away from the entry, please consider thevolatility condition at that moment to decide the stop-loss, or you can set thestop-loss few pips away from the previous low, or you can step stop-lossbased on your trading style, and how you manage the trade, it doesn't matter, whatmatter is that you feel the most comfortable with and you accept the risk for taking profit you can set a fixed level of risk reward ratio two or three times to your risk, or there's another way for you to set take profit, take a lookat the stochastic, so our entry point here around this area, once you see price moves up and enter the overbought area you grab profit andexit the trade in here, so let's have a look in total we can how many pip inthis trade, let's say we set the stop loss in here, and taking profit aroundthis candle, because that is the moment that the price enter the overbought, so wetake profit in here, now let's have a look in this case how many pips we risk, and how many pip we gain in this single trade, so we gain around 14 pipsfor this trade, and the risk is around 11 pips so we risk 11 pips for 14 pipsin this case, the ratio is 1:1+ it's not bad, let's move on to the nextexample just few moment after that, we have another chance in here to entertrade, that satisfied all the criteria of this system, I'll say here's the entry, and this will be take profit, if you followed the method about the oversold/overbought & set the take profit, then this will be the level where we exit thetrade with profit, let's have a look at risk reward ratio and how many pips wegain in this trade, so here's the entry point, and entry point to the stop-lossis around 10 pips, the entry point to take profit is around 16 pips so 1:1.
6 and as you can see after take profit we set, theprice still continue the trend and at the level that we set take profit, it is justhalfway of that, let's find another example on different currency pairs, ohyeah one thing I want to share with you to save your time and increase theefficiency when you scan multiple currency pairs, there is an indicator named”symbol changer”, I'll put a link to download this indicator in thedescription of this video on youtube channel, for setting you don't have tochange anything click OK, alright up here we have the panelwith different button represent for the currency pairs, down here in this row wehave the time frame, so right now highlighted with the blue color, you seeEURUSD with the 5 minute time frame now let's have a look on anothercurrency pairs, how about EURJPY okay for the EURJPY justlast night we have a really good period to use this strategy to grab some pipsfrom the market, so this will be our entry this will be our entry this will be another entry but we hit stop-loss inhere and finish the day, so when the price enter the oversold area and give asignal that the price will go up with a combination of the small bearish andfollowed by a bullish candle in here in this case we've just entered thetrade after the bearish with the body shorter than the lower wick in here, when the price close that would be our entry point stop-loss we set it a few pipsbelow the previous low, take profit will be around there, now let's have a lookhow many pips of risk and reward so for this trade we risk 10 pipsfor 20 pips, so again it's not bad the risk reward ratio is 1:2 for thiscase and again after you see the take profitis hit, the price still continue the trend up until here, so the point we set takeprofit is again half way of the impulse, now to maximize the profit, you might combine withdifferent method to increase the profit for example instead of enter just onetrade you divide that trade into several smaller trade, and you set different level oftake profit for different trade, let's say, follow ratio of risk reward like 1:1 1:2 1:3, or you can use your favorite tools to determine themomentum of the price and volatility of condition of the market, at that moment, alright let's move on to the next trade after that, so the price entered theoversold around this candle, where the trade after the next bullish candleclose right here, that will be our entry level stop-loss around here, few pips below theprevious low and take profit in here after the price enter the overboughtarea so we risk 9 pips to have 26so the ratio for this trade is 1:5 in here we have another trade, butthis trade hit the stop-loss later, so let's take a look how much we lost, okay so Iwill enter in here, this will be the entry, this will be the stop loss, few pipsof the previous low, so how many pips we loss in here? so in this case we lossaround 11 pips, for this trade we gained 25 pips, for this trade we gain around 15 pips, so overall just with a few hours last nighttrade, using this strategy, we gained in total of 29 pips with no sweat at all, so you can see how simple and powerful this system is, and this is one of myfavorite scalping strategies that I use for the last couple months let's haveanother look at a different currency pairs what about USDJPY, I love JPY, JPY is sweet, right in the morning that you can find several entries that cangenerate couple pips profit for you in here, this trade and up in profit but itdoesn't meet the first criteria, the market is bumpy, up and down crossing theEMA 200, this is the condition in the market that you should not enter thetrade & try to have revenge on the previous losses, if you insist to do so you'll end up in more and more losing trade, and with pleasure, anger will jump in and happy to blow your account so while scalping, try to be disciplined, no revenge, no anger, no greedy, just stick with the rules, if you see the conditionin the market like this, stay away from the trade, the market will still be heretoday, tomorrow, next week, and next years you will have a lot of opportunities to enterthe market, so try to control your emotions, especially in a bad day you hitseveral stop-loss, so come back to previous day, we have a nice entry here, in here looks like we hit stop-loss in here we might still enter thetrade because the candle are not closed above the EMA just the shadow of thewick, the price enter the oversold here, we take profit in here, all right so that'sit for this strategy, if you have any recommendation any comment anyimprovement please leave a comment below me and the other trader reallyappreciate that, and if you like and see the potential of the strategy pleaseconsider to like, subscribe, and hit the bell button, by doing that it is thereally great support to my channel and I know that I'm doing the right thing and I will continue to contributors to you others system in the future, alright, thank you forwatching and I'll see you in the next video, as always happy trading and staygreen.
