Forex Scalping with MACD - an Effective Forex Scalping Strategy - Advanced Forex Strategies

Forex Scalping with MACD indicator, when applied objectively can offer traders a quick way to build profits. The Moving average convergence and divergence indicator or MACD for short is one of the most widely used trading indicators (oscillators) only next to the moving averages. For traders who wish to trade the intraday markets, the MACD indicator can be of great help. Of course, as with any scalping strategy, traders need to be quick in terms of entering and exiting the markets. In this scalping strategy with MACD indicator, we first make use of a custom MACD indicator (you can download it below by just sharing) for the MT4 platform which includes both the Signal line and the MACD line besides the Histogram. We use the customer MACD indicator because the default MACD indicator with the MT4 platform comprises only of the MACD histogram and the signal line.

[sociallocker id=”5808″] Click here to Download the Forex MACD Scalping Indicator [/sociallocker]

Forex Scalping with MACD – How to Scalp Profitably with it!

The first step is to apply the custom MACD indicator, which can be downloaded from here. The default settings are used as is.

For buy/long signals, the first step is to wait for a bullish divergence to be formed in relation to the MACD histogram only. When price makes a lower low but the MACD histogram makes a higher low, it indicates a bullish divergence. When this scenario presents itself, wait for the MACD and Signal line to make a bullish crossover below the 0-line. Go long on the candle close and place stops a few pips below the most recent low. The long position is closed when the MACD and Signal line make a bearish crossover above the 0-line.

For sell/short signals, the first step is to wait for a bearish divergence to be formed in relation to the MACD histogram. When prices make a higher high but the MACD histogram makes a lower high, it signals a bearish divergence. We then wait for the MACD and Signal line to make a bearish crossover above the 0-line. Short positions are entered on the candle close and stops are placed at the recent high. The short position is closed when the MACD and the Signal line make a bearish crossover below the 0-line.

[sociallocker id=”5808″] Click here to Download the Forex MACD Scalping Indicator [/sociallocker]

MACD Scalping Strategy Buy/Sell Signal Examples

Forex Scalping with MACDForex Scalping with MACD – Buy Signal Example

The first chart above illustrates a MACD Scalping Buy signal example. Here, when prices make a lower low, the MACD histogram plots a higher low. With the bullish divergence being established, we then see the MACD line and the Signal Line making a bullish crossover. A long position is entered on the candle’s closing price and stops are set to the nearest low. The long position is closed out when the MACD Line and the Signal Line make a bearish crossover above the 0-line.

Forex Scalping with MACD - Sell Signal
Forex Scalping with MACD – Sell Signal

The second chart above shows a MACD scalping sell signal example. Here, a bearish divergence is established with prices making a higher high and the MACD histogram making a lower high. When the MACD and the Signal line make a bearish crossover, a short position is entered on the candle’s closing price. Stops are placed at the recent high. The short position is closed out when the MACD and the Signal line make a bullish crossover below the 0-line.

In both the cases, the MACD oscillator allows traders to capture quick profits with relatively tight stops in comparison. Of course, the key to success with the MACD oscillator is for traders to identify the bullish and bearish divergences which are leading indicators or phenomena that signals a potential short term shift in the markets. Learn more about MACD Divergence trading here.

Forex Scalping with MACDAs illustrated above, the scalping strategy outlined with the MACD indicator is a simple and effective strategy. Traders need to be adept at spotting the divergences and also need to be quick in terms of entering and exiting the markets. Money management is essential in order to ensure that the winning ratio outweighs any losers using this trading strategy.


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