Standard Deviation Scalping Method - MT4/MT5 Resources
Hi,
I discovered a scalping technique called the "5-Minute Standard Deviation Scalping" (Pattern #5 in the attached document). I'm wondering if anyone has tried this technique.
Simply put, on a 5-minute chart, you apply 10 moving averages and 1 standard deviation on each side. I'm using Bollinger Bands(10,1).
When the trend is up (the slope of the band), wait for price to fall into the lower band before entering the long position. Exit when price reaches another range.
When the trend is down, wait for price to hit the upper band and then go short. Exit when price reaches another range.
To ensure that the trend direction is correct when price hits the channel, I use the 10EMA closing price and the 10EMA opening price. If the 10EMA close is higher than the 10EMA open, then the trend is up when the price crosses the lower band. Downtrend reversal.
Sometimes the price does not reach another band, but crosses the middle line of the BB line. The midline can also be an exit signal. There are also false signals (less than good ones) and I'm not sure about the stop loss. I think 1XATR is probably a good guess since it's based entirely on volatility.
On the picture I've circled the entry signal. Sometimes the price will reach another band and sometimes it won't, but most of the time it will cross the middle line of the BB line.
Any comments would be greatly appreciated. If you can look at 3 or 4 currency pairs with low spreads, the end result should be interesting.
Thanks.
I discovered a scalping technique called the "5-Minute Standard Deviation Scalping" (Pattern #5 in the attached document). I'm wondering if anyone has tried this technique.
Simply put, on a 5-minute chart, you apply 10 moving averages and 1 standard deviation on each side. I'm using Bollinger Bands(10,1).
When the trend is up (the slope of the band), wait for price to fall into the lower band before entering the long position. Exit when price reaches another range.
When the trend is down, wait for price to hit the upper band and then go short. Exit when price reaches another range.
To ensure that the trend direction is correct when price hits the channel, I use the 10EMA closing price and the 10EMA opening price. If the 10EMA close is higher than the 10EMA open, then the trend is up when the price crosses the lower band. Downtrend reversal.
Sometimes the price does not reach another band, but crosses the middle line of the BB line. The midline can also be an exit signal. There are also false signals (less than good ones) and I'm not sure about the stop loss. I think 1XATR is probably a good guess since it's based entirely on volatility.
On the picture I've circled the entry signal. Sometimes the price will reach another band and sometimes it won't, but most of the time it will cross the middle line of the BB line.
Any comments would be greatly appreciated. If you can look at 3 or 4 currency pairs with low spreads, the end result should be interesting.
Thanks.
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