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March 7, 2022

FxPro, Introduction of Ultra-fast Scalping strategy with MACD & Bollinger Bands

By using MACD and Bollinger Bands, you can perform ultra-fast Scalping strategy in Forex. Here is how.

Introduction-of-Ultra-fast-Scalping-strategy-with-MACD-&-Bollinger-Bands Introduction-of-Ultra-fast-Scalping-strategy-with-MACD-&-Bollinger-Bands

Ultra-fast Scalping Strategy

We often get lots of requests from FXPro traders about how to scalp professionally. This is indeed a difficult trading style that requires good reaction and skill. That’s why we have thorough coverage of this topic on our website. You can already find a strategy with Bollinger Bands and a 5-minute scalping strategy with two moving averages in the “Tips for Traders” section. They have an interesting thing in common: they are both implemented on the M5 timeframe. On this timeframe, a trader can execute several trades in an hour. Of course, trading in small timeframes requires total attention and patience.

What if we told you that you can trade faster on the M1 timeframe? Yes, it’s possible! However, you need to follow certain steps to avoid the dangers of misleading signals.

First of all, use an easy strategy with custom entry and exit rules.

Second, know how much risk you can take. Make sure that your take profit is at least twice as big as your spread.

Third, choose the most liquid pairs with the tightest spreads (EUR/USD, GBP/USD, USD/CHF, USD/JPY).

Important tip: it is highly recommended to choose an ECN account for scalping . They provide fast order execution.

If you are comfortable with the rules we stated above, let’s look at the strategy!

Try Scalping Strategy on FxPro

Trading strategy “MACD + Bollinger Bands”

Trading settings: Bollinger Band with 100 periods, Bollinger Band with 20 periods, MACD (12; 9; 26).

Trading instruments: EUR/USD, GBP/USD.

Buy entry rules:

  • The fast Bollinger Band (20) should move below the slow Bollinger Band (100).
  • MACD needs to cross its signal line from the bottom up in the oversold zone (below zero).
  • Open the “Buy Stop” order button when this condition is applied.
  • Place a Stop Loss on the lower Bollinger Band (20).
  • If you are following a less risky approach, place your Take Profit at the upper limit of the Bollinger Band (20).
  • For risk takers, you should close your position when MACD crosses the signal line above zero.

Let’s look at an example.

Trading strategy MACD + Bollinger Bands

On June 30, we are trading GBP/USD. The fast Bollinger bands move below the slow ones. At approximately 11.16, we entered the trade at 1.1892 after the MACD signal line crossed the indicator in the oversold zone. Stop Loss is located at 1.1884 (lower Bollinger Band (20)), while Take Profit is placed near the upper Bollinger Band (20) at 1.1898.

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Selling entry rules:

  • The fast Bollinger Band (20) must move above the slow Bollinger Band (100).
  • MACD needs to cross its signal line in reverse in the overbought zone (above zero).
  • Open the “Sell Stop” order button when this condition is applied.
  • Place a Stop Loss on the upper Bollinger Band (20).
  • Rule for conservative traders: place your Take Profit at the lower limit of the Bollinger Band (20).
  • Rule for risk takers: close your position when MACD crosses the signal line below zero.

Selling entry rules ultra fast scalping

On the same chart, the situation on June 30 allowed us to sell the pair. After the MACD signal line crossed the indicator in the overbought zone and the fast Bollinger Band (20) started moving above the slow one (100), we opened a position at 1.1906. We placed Stop Loss at 1.1907 and Take Profit at 1.1898.

Scalping on the M1 timeframe is not a popular technique considering the risks. You have to be cold-blooded, be a quick decision maker who thinks ahead and understands the actions taken. We recommend that you master the above trading strategies on a demo account first. In this way, you will definitely become an expert in scalping.

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