Whats going on playas and pimps
These trading strategies are designed only for those who prefer entering market frequently and takin small profits each time. To put it simply these are the scalping techniques which should be employed on the lowest time frame available on the metatrader 4(or you own broker) (1- minute and 5 minute time frames would be perfect).
First i suggest to discuss the rapid-fire strategy and then to switch to the more ferocious one-piranha strategy.
- The most liquid currency pair is-EUR/USD
- The lowest and the most exhilarating timeframe available on the broker’s platform -M1
Parabolic SAR with default setting(Step 0.02., max 0.2)
Simple moving average, period 60. The SMA 60 is used for identification of the direction of the momentum.
So when the price is above SMA 60 you should go long. IN the reverse scenario, if the price is below the SMA 60, go short.
“Rules of the game”
- You should catch the moment when the market price moves above the SMA 60
- Then look for Parabolic SAR moving above the price
- If the first two conditions are respected, you may enter the market long. The market price should go above the Parabolic SAR, the parabolic SAR should be below the market price.
- The stop loss should be placed at 15 points below the entry price.
- The profit target should be set at 10 point above the entry price.
The risk for this trade can be estimated at 15 points, the reward is 10 points. The risk to reward ratio is 1.5:1 (2% return against 3% risk).
The next strategy is called “PIRANHA” which is like a cannabil in the fish community. They have strong teeth and sharp jaws. So, if we decide to apply this “eating” style to put trades we should “bite” the market lots of times and chew up them small profits.
“Piranha Strategy ingredients:”
2. GBP/USD currency pair.
Bollinger Bands with period 12, shift 0 and deviation 2(default). Bollinger Bands are used for identification of the trading band of the GBP/USD. You should go long then price touch the bottom band; the short trades should be taken when market prices reach the upper band.
“Rules of the game”
This strategy is designed for trading in a trend.
As we already know piranhas are only stay in the fresh river water( they own hood). Not in ocean and seas with string currents, tides and powerful waves( other peoples hoods). So pretty much the came can be said for this strategy: You should avoid using this strategy after ground shaking events or important releases.
- First, you should wait until prices touch the bottom band of the indicator;
- Then you may enter long
- Set the stop loss at 10 points below the entry price:
- Set the profit target at 5 points above the entry price.
The risk for this strategy is 10 pips, while the reward is 5 pips the risk -reaward ratio is 2:1 ( return -1.5% if we take 3% risk)
Strategies are taken from the book “17 proven currency trading strategies” written by Mario Singh