5
minute scalping with Overbought and Oversold is a momentum trading
system based on Bollinger Bands and Relative Strength Index
Strategy
Setup
Indicators:
Bollinger
Bands: Period 25, Standard Deviation 2.0
RSI:
14 periods, with MA 11 periods
Time
Frame: 5-minute chart or higher.
Trading
Sessions: Berlin
Currency
Pairs: EURUSD, EURGBP, AUDNZD.
Entry
Conditions
Buy
Price
Action: The price must close outside the lower Bollinger Band.
RSI
Condition: The RSI must be below 30.
Sell
Price
Action: The price must close outside the upper Bollinger Band.
RSI
Condition: The RSI must be above 70.
Exit
Conditions
Stop
Loss
Set
the stop loss at 5 pips or at the upper/lower Bollinger Bands, which
ever is closer.
Profit
Target
Set
the profit target at 3-4 pips or at the middle Bollinger Band,
whichever is reached first.
Additional
Rules
Avoid
Trading Before Major News Releases:
Refrain
from entering trades shortly before significant economic
announcements, as they can cause unpredictable market movements.
Trend
Confirmation
Downtrend:
Do not enter a buy position until the price has penetrated the center
line of the Bollinger Bands upwards, indicating the potential end of
the downtrend.
Uptrend:
Do not enter a sell position until the price has penetrated the
center line of the Bollinger Bands downwards, indicating the
potential end of the uptrend.
Example
Strategy Implementation
Identify
Trading Sessions:
Ensure
you are trading within the specified time frames (2am-5am, 8am-12pm,
7:30pm-10pm EST).
Monitor
Bollinger Bands and RSI:
Set
up Bollinger Bands with a period of 25 and a standard deviation of
2.0.
Set
up the RSI with a period of 14 and a moving average of 11 periods.
Look
for Buy Signals:
If
the price closes outside the lower Bollinger Band and the RSI is
below 30, prepare to enter a buy position.
Set
your stop loss at 5 pips or at the lower Bollinger Band.
Set
your profit target at 3-4 pips or at the middle Bollinger Band.
Look
for Sell Signals:
If
the price closes outside the upper Bollinger Band and the RSI is
above 70, prepare to enter a sell position.
Set
your stop loss at 5 pips or at the upper Bollinger Band.
Set
your profit target at 3-4 pips or at the middle Bollinger Band.
Trend
Confirmation:
In
a strong downtrend, wait for the price to penetrate the center
line of the Bollinger Bands upwards before entering a buy position.
In
a strong uptrend, wait for the price to penetrate the center
line of the Bollinger Bands downwards before entering a sell
position.
