Forex market comprises different kinds of traders like scalpers, day traders, swing traders, position traders. Different types of traders have different types of specialisez trading knowledge. Scalpers and day traders always try to trade on a lower timeframe like 1 minute, 5 minutes, and 15 minutes. Although there is a much shorter timeframe fixed on mt4 & mt5 chart, if you stick to this 5 min forex trading system, the chance is higher; most of the trade you opened will go in profit.
An experiment reveals that forex traders are human beings, so they tend to act differently. One school tends to remain active in trading and trade with momentum. They jump the trade seeing the momentum. These traders always search for 1 minute scalping strategy, 5 minute stochastic strategy, 5 minute time frame intraday trading strategy, best 5 minute scalping strategy. This means they are short-term traders. They open and exit the trade randomly. all the things happen even in the blink of an eye.
Another school of famous traders doesn’t bother about How to trade 5 min forex chart,5 minute forex trading system, or 5 minute forex trading strategy. Instead, they are basically long-term traders and focus on big time frames like daily charts or 4 hour charts and weekly charts.
5 min forex trading system or shortly EMACD explained
Technical indicators needed: 1. 20 period of time EMA
2. MACD. MACD settings for 5 minute chart will be ( 12,26,9)
bullish signal/Buying rules: First, we need an entry price below 20 EMA. Then we will check whether MACD is in negative territory or not. secondly, we will wait for the current price to cross above the 20 EMA, and MACD will cross from negative to positive within the last 6 bars on 5 minutes chart.
If these two things happen, then we will open long position 5 pips above the 20 ema.
Just take a look at the picture I attached.
Here in CADJPY 5 minute chart price cross 20 EMA and MACD indicator come from negative to a positive value. So if we open trade here, we could ride a fantastic trade and make a handsome amount of profit.
Trade management rules:1. Stop-loss must be below the recent swing low on the 5 minute chart.
2. Close half position when it hit 1:2 profit target and set breakeven for half position. Remember if you don’t follow the exact entry rules then you will get many fake signals. For getting accurate trade signals you need to stick rules as I mentioned above.
Take profit: use 1:2 take profit target to get consistent profits.
Sell signal/bear markets rules: first, we need a price above 20 EMA.then we will check whether MACD is in positive territory or not. Secondly, we will wait for the price to cross below the 20 EMA, and MACD will cross from positive to negative within the last 6 bars on 5 minutes chart.
If these two things happen, then we will open short position 5 pips above the 20 ema.
Trade management rules:1. Stop-loss must be above the recent swing high on the 5 minute chart.
2. Close half position when it hit 1:2 profit target and set breakeven for half position.
Take profit/exit signal: use 1:2 take profit target.
Caution about 5 min forex trading system EMACD
I showed you here an example of how powerful is this 5 min forex trading system (EMACD ).this strategy successfully gives signals of momentum-based reversal trades. But the irony of the fact is that this strategy will not always work. So it would help if you were wary here. You need to be very, very careful if you trade with this strategy. Trade only top traded major currency pairs.
Remember, if you come to trade with this strategy in a choppy market when market volatility is very poor, you will fail many times. This is because many false signals you will get here.
Many short-term inpatient currency traders only follow 20 EMA signals, and before getting signals from MACD just open the trade, they will also fail to make money with this strategy.
As MACD is the best indicator for 5 min chart, so you should not ignore the MACD indicators signal. Combine both the indicator, and you will get a less false signal.
Benefits from price action
Many price action lovers should love this strategy as this one also trades with candlesticks signals. If price candles don’t break 20 EMA, we will not open trade so that we can call it easily 5 minute price action trading.
How to trade forex/financial markets with a simple strategy
If you want to trade forex simple way, then you need a rock-solid strategy. In this piece of content, I showed How to build a currency trading system & How to create a forex trading system. If you master this one, then you don’t need anything to get success.
The 5 min forex trading system (EMACD ) allows you to profit from short-term momentum. In this strategy, I explain How to trade forex step by step in a shorter timeframe. Of course, every good strategy should have solid exit rules, so this one has that feature. And if you trade with this system maintaining all the rules I described you will also become a profitable trader and get financial freedom.
The sole aim is to detect a reversal move. Then open a position. And lastly, book the profit silently exit the trade and enjoy your trading journey. Lead a happy life with friends and family members spending these profits. bingo!