The proposed trading strategy is designed for working with high-volatility currency pairs GBP/JPY and USD/JPY using Bollinger Bands.
Input Parameters:
- Currency Pairs: GBP/JPY, USD/JPY
- Timeframe: M1, M5, M15
- Trading Time: any, preferably between the opening of the London session and the closing of the Japanese session
- Strategy Type: scalping
Used Indicators: Bollinger Bands (bollinger bands)
- Period 50, deviation 2 (red line)
- Period 50, deviation 3 (orange line)
- Period 50, deviation 4 (yellow line)
Trading Strategy Principle:
Trading takes place in a one-minute window, while five- and fifteen-minute intervals are used to track the overall picture and detect a strong trend before you start trading against it.
Do not start trading on calm markets or during quiet periods (you might just waste time), and do not trade before important financial news releases to avoid sudden events. Take profits in small increments of 5-10 pips.
Stop loss in this scalping strategy is constantly adjusted manually.
Because trading happens very quickly, it is necessary to keep a close eye on the market. You can choose two ways to set the stop loss: either close the position as soon as you think you have made sufficient profit (even without waiting for any losses), or set a maximum trading duration, limiting yourself to a few minutes.
Opening a Short Position
When the price line crosses the upper red Bollinger Band and reaches at least halfway between the red and orange band (ideally, even touches the yellow line, although this does not happen often), it is a clear sign that the price will recover and move downward, meaning it’s the perfect time to sell.
Opening a Long Position
The same rules apply as for selling, but the price line should cross the lower red band instead. The deeper the price line goes beyond the red line, and ideally crosses the orange and yellow lines, the better.
According to experts from ForTraders.org, since this scalping trading strategy earns on price peaks and rebounds, it is unlikely to worry about its value falling below the last minimum peak or rising above the last maximum peak in the short term (1, 3, 5 minutes). However, do not stay in the trade for too long.
Download the Trading Strategy Template
Other Scalping Trading Strategies
- Sane FX Trading Strategy: Scalping on Currencies and Gold
- The Secret Strategy: Simple Forex Scalping Strategy
- Kevinator Retracement Scalping Trading Strategy
- Forex Scalping Strategy Hells Angels
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“excerpt”: “A forex scalping strategy using Bollinger Bands for the Japanese Yen.”,
“slug”: “forex-scalping-strategy-bollinger-bands-japanese-yen”,
“faq_html”: “
FAQ
What is a Bollinger Band?
Bollinger Bands are a technical analysis tool used to measure volatility and identify potential overbought or oversold conditions in the market.
How does a scalping strategy work?
A scalping strategy involves making numerous small trades to capture minor price movements, aiming for quick profits with tight stop-loss orders.
Why use Bollinger Bands for scalping?
Bollinger Bands help traders identify trends and potential reversals by showing the price’s range relative to its moving average, making them useful for quick decision-making in scalping.
”
