Gbpjpy Scalping Strategy 20 Pips

This forex trading strategy relies only on the British Pound against the Japanese Yen to capture just 20 pips. It is a very simple approach.

The scalping strategy

With this strategy you trade only during the London session and the United States session.

When price is above the 25 moving average, this is treated as an uptrend.

When price is below the 25 moving average, this is treated as a downtrend.

Important note: If you see the 25 moving average moving sideways (a ranging market), you should not trade.

Time frame used: 5 minutes

Currency pair: GBPJPY

Indicator: 25-period exponential moving average

Rules for trading the strategy

Buy entry conditions:

• A clear, non-sideways uptrend in the 25 EMA.
• Price must be above the moving average.
• Buy at market price once a bullish candle closes above the moving average.
• Place the stop loss at least 10 pips below the entry candle.
• The take-profit target is 20 pips.

Sell entry conditions:

• A clear, non-sideways downtrend in the 25 EMA.
• Price must be below the moving average.
• Sell at market price once a bearish candle closes below the moving average.
• Place the stop loss at least 10 pips above the entry candle.
• The take-profit target is 20 pips.

Drawbacks of the strategy

This system performs very poorly in ranging markets, which is why you need to watch for that clear direction in the moving average to make sure you are not trading through a sideways market.

With this scalping strategy, when you see price moving above the fast 25-period moving average it tells you the trend is up, and if price moves below the fast 25-period moving average the trend is down.

You should also watch the angle of the fast 25-period moving average. If it is sloping at around 30 degrees, that also points to a decent trend. If it is flat, that tells you the market is ranging, where price is consolidating and not really moving anywhere up or down at all.

You should avoid trading in situations like these, because you will get too many false signals and get stopped out again and again.

Frequently asked questions

What is the best strategy on the one-minute time frame?

There is no such thing as a single best trading strategy, because a trading strategy differs from one person to another. In general, though, classic analysis tools can be considered the simplest and easiest among trading strategies.

What are forex strategies?

There are several types of trading strategy, such as scalping and swing trading, as well as position trading. You can review many forex trading strategies in the educational section on the trading site.

What is a scalping strategy?

Scalping is a strategy or method in which you trade on short time frames, from the one-minute up to the half-hour, and scalping trades often take only a few minutes.

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