I designed this 5-minute scalping strategy to target 10 – 30% ROI monthly or yearly, depending on the approach.
One could ask, man, how did you come about those figures? I converted this 5 minutes scalping strategy into a Forex robot/expert advisor. Therefore I was able to test with different settings.
This then means that, apart from the scalping strategy explained here, you will also be able to get hands-on with a custom indicator and fully automated expert advisor built from this strategy.
It is important to note that while this article focuses on the 5-minute trading timeframes, it can also be implemented on other timeframes like the 1-minute timeframes and the 15-minute timeframe.
Need it to be trade entry, trade exits, trading sessions, currency pairs, stop loss and take profit? This article exposes the how and why for any 5-minute scalper.
Accurate 5-Minute Scalping Strategy – Quick Info
Indicators: Exponential Moving Averages
Parameters: 50 EMA,100 EMA 150 EMA
Market structure: Any volatile structure. Preferably trending
Strategy: Pullback trading
Recommended lot size: 0.01
Backtest ROI: 10% – 30%
Timeframe: 5-minute chart
Currency pair: All Major Currency Pairs
PDF Version: Available
Semi Robot (Indicator): Available – 5-Minute Scalping Indicator
Strategy Video ( You will get more info in the video)
Yeah, I prefer you watch the video for this strategy, as it’s more explanatory. Meanwhile, this article is also comprehensive. If you want the PDF version of this 5-minute scalping strategy, then you can download it below as well.
Remember to subscribe to my youtube channel to get updates when I release new videos.
5 Minutes Scalping Strategy PDF
Why Trade the 5-minute Scalping Strategy?
1. Fast-entry and exit:
Scalping, in general, provides room for quick trade entries and exits.
With this strategy, you’re sure of a strategy that promises you quick entry and exit while consistently providing you with a good return on your investment.
2. Enough time:
If you’re a trader that doesn’t really do a 9-5 or you generally have time on your hands to trade for one reason or the other, then this strategy is definitely for you.
You’d have the time to make all the analyses you want and look at all the pairs and markets you want before making those trades.
3. Doesn’t select currency Pair:
That’s the beauty of it! It’s compatible with all currency pairs.
Although if you want to get a better piece of the action, I recommend certain currency pairs like EUR/USD, AUD/USD, NZD/USD, GBP/USD, etc.
Indicators to use
- 50 exponential moving average
- 100 exponential moving average
- 150 exponential moving average
These exponential moving averages are the best indicators to use when you’re trying to capture a wide view of the market.
Seeing as they all use different parameters to calculate their perspective averages, they all impose different representations of the market at different points in time.
Although there are other exponential moving averages like the 20-exponential moving, it’s best to use the ones highlighted above in this strategy.
The 20-exponential moving average carries a lot of noise with it because of how much the algorithms align with the actual market data.
It is almost next to real-time, and that disqualifies it for this strategy because of the random movements it carries with it.
Although different strategies use different exponential moving averages, if 20 exponential moving fits your strategy, then, by all means, use it.
But as for this strategy, it works best with the 50-exponential moving, 100-exponential moving average, and 150-exponential moving average.
5 Minutes Scalping Strategy – ENTRY
ENTRY RULE #1
Wait for all 3 indicators to point in the same direction:
For you to have confirmation of your entry, the three exponential moving averages MUST be pointing in the same direction.
As basic as this may sound, it’s easy to get carried away and misinterpret this rule.
This is a perfect example of how this strategy works.
In the charting software above, we can see the market moving downward following after the three exponential moving averages have moved.
This right here is a valid sell position.
The above is a strong indication of a sell position. Remember the first rule states ‘that all the three exponential moving averages must be pointing in the same direction.
As we can see, the blue line of the 50-exponential moving average, the red line of the 100-exponential moving average, and the green line of the 150-exponential moving average all point upwards, indicating a buy trade.
This completely satisfies all the requirements for the first rule.
ENTRY RULE #2
Wait for the first pullback:
What do I mean by the first pullback? I’ll explain.
This strategy borrows part of its concept from pullback trading.
The trick is just to pay attention to the indicators and price action.
The second rule for market entry in this strategy is to wait for a situation where the candlestick formation dips into the 50-exponential moving average and then forms back above it.
This is part of the entry confirmation to taking an entry position on this strategy. You must wait for the market to dip below the 50-exponential moving average and then form above the 50-exponential moving average.
Often times the candlestick formation can also dip below:
the 100-exponential moving average and continue back above the 50-exponential moving average.
Do not panic because this is also permissible.
The market can dip below the 100-exponential moving average, BUT it is impossible to note that it cannot and shouldn’t dip below the 150-exponential moving average.
If the price action moves below the 150-exponential moving average, the second rule has not been satisfied.
ENTRY RULE #3
Note: the second pullback price must be higher or lower than the first pullback price in a buy or sell market, respectively
Cannot stress how important this rule is.
This particular rule forms the bases of this entire 5-minute scalping strategy.
Remember the first rule that said the first pullback must dip below the 50-exponential moving average?
Well, this particular rule is like a subset of that rule.
The only difference is the price. Let me show you a practical example:
In the image above, we can see two times where the candlestick formation obeyed this rule.
The two arrows show the first and the second pullback crossing into the 50-exponential moving average and continuing back above the 50-exponential moving average.
The key difference is that the second time, the pullback is lower than the first pullback.
The price would have to be higher than the first pullback in a buy trade because of the direction of the market.
In a sell market, the price would be lower.
Then you enter your position.
5 Minutes Scalping Strategy – EXIT
EXIT RULE #1: SL on the signal candle +10 pips (1:1 or 1:2)
This is better explained with the use of the chart:
As observed in the image, the arrows point to areas where the market satisfied the first and second rules of the strategy, which dictates that ‘the second pullback must be greater than the first pullback in a buy trade’’.
After which, you then enter your buy position.
Knowing this, the exit strategy stipulates that you put your stop loss on the signal candle, i.e., the areas marked X in the image above or ten pips below your market entry.
It is advisable that if you’re using a 10 pip stop loss, then you can put your take profit 20 pips above your entry to allow a 1:2 profit ratio.
EXIT RULE #2: SL on the Moving average +10 pips (1:1 or 1:2)
Another stop loss position is putting your stop loss on the red line of the 100-exponential moving average.
EXIT RULE #3: SL on Recent Low and Take Profit On Recent High
This particular exit strategy is quite self-explanatory.
In this particular exit strategy, the take profit would be set on the recent high, i.e., the blue spot in the chart, while the stop loss would be placed on the yellow spot in the chart.
Small pips of profit are the reason for this 5-minute scalping strategy, after all.
Conclusion – 5-Minute Scalping Strategy
Whether you are scalping on the 1- minute time frame, 5-minutes, or 15-minute timeframe, there usually is one major denominator for successful execution.
And that is the undivided focus.
This 5-minute scalping strategy can’t be ‘’half-assed’’ it requires undivided attention for all the obvious reasons.
For these reasons, I have programmed a forex expert advisor in the form of a custom scalping indicator and a fully automated forex robot based on this successful 5-minute chart scalping strategy.