Forex Day Trading Strategy: Heikin Ashi, MACD, RSI and Moving Averages (5 and 100)

Updated: Aug 31

Forex day traders do not hold on a position for so long. They make profit by getting in and out of trades several times in a day. They also don't hold any trade overnight.


Related Post: Types of Forex Traders Based on Time Spent in the Market


This is just one of many forex day trading strategies. This post intends to give you insights on how MACD, RSI and 2 moving averages can be used in day trading. This strategy works well with trending and highly volatile pairs (e.g. GBP/AUD, GBP/USD, GBP/JPY, EUR/AUD, etc.) on 5-minute charts.

Time Frame:


5-minute chart



Indicators:


  • Heikin Ashi candles (colors: white for uptrend and red for downtrend)

  • Exponential Moving Average (EMA) Period 5, Shift 2, Apply To Typical Price (HLC/3)

  • Simple Moving Average (SMA) 100, Shift 0, Apply To Close

  • Relative Strength Index (RSI) Period 10, Levels 45 and 55

  • MACD histogram (12, 26, 9) (colors: red for downtrend and green for uptrend). This is not the MACD found in your MT4. You can download 'MACD True' from forexfactory.



Buy Set Up


Place a buy order when all of the following circumstances are met:


  1. EMA 5 is above SMA 100

  2. Heikin ashi candle turns white and is above your EMA 5 and SMA 100

  3. RSI is above level 55

  4. MACD histogram turns green.

  5. Stop loss is 20 pips. Take profit is 20 pips.


Sell Set Up


Place a sell order when all of the following circumstances are met:


  1. EMA 5 is below SMA 100

  2. Heikin ashi candle turns red and is below your EMA 5 and SMA 100

  3. RSI is below level 45

  4. MACD histogram turns red.

  5. Stop loss is 20 pips. Take profit is 20 pips.



Forex Day Trading Strategy


Additional Helpful Forex Scalping Tips:

  • Do demo trading until you master a strategy.

  • Once your profit turns to 15 pips, you can place your stop loss to breakeven. This can help protect your capital.

  • Stop loss is always 20 pips. Never risk more than 2% of your account per trade. Less risk is always better.

  • Remember, trading is a high-risk investment. Just as many well-experienced traders say, "Only trade with money you can afford to lose."



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