The system of short-term trading at the Forex market
Trade Channel Scalping” system is designed for short-term transactions with the purpose of frequent and quick obtaining of small profit. That’s what they call scalping. Timeframes from 1 minute to 15 minutes are used for trading using this method. The Trade Channel Scalping system can be used for any currency on the Forex market. However, not all brokers allow short trades. Therefore, it is necessary to find out which scalping brokers offer acceptable conditions.
This system is based on only two modern indicators. The “Trade-Channel” indicator draws on the chart with thick blue lines the current range of price movement and dashed lines the intermediate levels based on the Fibonacci grid. The “Doda Stochastic” indicator is an improved version of ordinary Stochastic. It automatically filters out false signals and more precisely indicates price reversal points. The older the timeframe, the more accurate it is. During flute movement on small timeframes any stochastics can be useless. That’s why you should choose the most volatile time for working with the “Trade Channel Scalping” system. It’s usually the London session and the beginning of the New York session.
In this figure, you can see an example of buying on a five-minute chart. To open a position, the price should bounce off the lower boundary of the Trade-Channel channel. The “Doda Stochastic” lines should fall below 30, and the green line should cross the red line upwards. The stop is set below the blue line. In this case, the position is closed at a strong level, taking into account the fact that the “Doda Stochastic” lines have risen above the level of 70.
This screenshot shows an example of a sale. In this case, the price broke through the lower boundary of the channel. The “Doda Stochastic” lines rose above 70, and then the green line crossed the red line. In this case, the stop loss is set beyond the nearest maximum. The position is closed after the price returned to the channel, and the “Doda Stochastic” lines fell below 30, and the green line crossed the red line.
There may also be situations when the price is in the middle of the channel, and the “Doda Stochastic” indicator gives a signal to sell or buy. In this case, the stop loss is set at the nearest minimum or maximum, and the take profit is set equal to it in points. You can also close a position when the opposite stochastic signal appears or use a trailing stop.
The supplied template also includes a Fibonacci fan. Its levels can be used in trading as local channels, the breakthrough of which will confirm the direction of price movement.
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