This one of for the scalpers who prefer to take their pips and run to the next currency pair. I know a lot of scalpers who have managed to make a lot of money through this XXL forex scalping system. Personally, it’s not my style of trading but hey, I can’t argue with the results. So, if you’re one of the forex scalpers, go there and make pips. (10 rules of how to earn money with scalping)
Technical indicators to use
All the technical indicators we’re going to use are free to download from the link at the bottom of this post. Most of them are custom indicators, but we shall also make use of some found in the MetaTrader platform by default. Without further ado, let’s get on with it, shall we?
4X 3 Semafor Alert
This will be our primary indicator in the XXL trading system. On the real-time forex charts, it appears in the form of circles at the peaks and troughs of trends, showing us points of a trend reversal. There are 3 colors for the circles – red, yellow, and green. A red circle will usually show up at the end of an uptrend, meaning that a downtrend may begin. A green circle is the opposite, and it means that a downtrend may reverse into an uptrend. A yellow circle is just a warning sign, showing uncertainty in the markets. Finally, there’s one unique circle, yellow but radiating. When this one forms, it is a strong signal of a trend reversal, unlike the previous ones that only hint at a trend reversal.
Heiken ashi candles
This indicator only changes the color of the candlesticks from hollow and white, to red and white. It is not only useful for aesthetics, though, as it can also be used to identify trend changes. By analyzing candlestick patterns, it can also be used to determine accurate points of trend reversal and avoid fakeouts. You can see this happen on your forex trading platforms when a trend seems to be reversing, but the Heiken Ashi candles still maintain the same color. Combined with the 4X 3 Semafor Alert, you’re much less likely to fall for fakeouts. For a scalper, this is essential because every pip counts.
Auto pivot points
It is possible to draw your pivot points and S/R levels like a pro, but this indicator makes the job easier for you. It will automatically generate the daily and weekly pivot point levels, along with the support and resistance levels that go with them. These values will be important in deciding whether to enter a trade, as we shall see in the next session on applying the strategy. (Pivot points strategy)
Centre of gravity indicators
In the downloadable archive, there are two CoG indicators labeled oanfx1cog8 and oanfx4cog. When these are added to the charts, they will appear as curving lines in blue and green. They are modified versions of moving averages, that deviate from the center to form a boundary. In a trending market, prices will be repelled by the CoG lines, bouncing off them and maintaining course. The closer the prices get to a CoG line, therefore, the more likely a short-term trend is about to reverse.
Information boxes
On either side of the main trading window are information boxes. On the left, FerruFx gives us information on the average daily range (ADR) and the strength of the current trend. A strong trend is one where the ADR is far from being reached, meaning that there is still potential momentum. To the right, daily data tells us how much we would incur in overnight swaps.
Indicators window
Below is the indicators window are 3 indicators, all of which work together to provide trading signals. BBands stop generates vertical bars colored in either red or blue when markets are trending downward or upward. It is used to show long-term trends, ignoring minor trend changes and market correction. (Looking for market correction)
We then have RSI divergence, shown in vertical bars too instead of a single line. However, just like the original RSI, it is an oscillating indicator showing overbought and oversold market conditions. It has been made into bars so that it can work with the stochastic indicator, another oscillator. (Best technical indicators and how to use them)
Working the XXL forex scalping system
With just these indicators, our trading system is ready to roll, and it’s time to rake in the profits. Let’s start with an example of a selling opportunity in the EUR/USD pair seen below:
Here, the first sign to sell comes from the information boxes on the left and right. FerruFx tells us that the downtrend is stronger, at 73%, which clearly shows bearish market sentiment. Besides, the ADR has still not been reached, so we have a long way to go. On the right, daily data shows the same, with the distance from low being higher than the opposite. (Forex market sentiment indicators)
We can confirm this from the indicators window, looking at the stochastic indicator, which is in overbought territory. The markets have been overbought so far, and a downtrend is likely. So far, the signals are ripe for a short, and BBands confirms that there is already a prevailing downtrend in the markets. Furthermore, CoG indicators are trending downwards, and prices just reached the upper CoG line. Usually, the prices will be repelled by this and go down. Finally, a check on 4X 3 Semafor Alert shows a red dot, showing that the current downtrend is about to reverse.
With the signals lined up, we should be ready to sell, and now it’s time to set our sights on the goal. This is where the auto-pivot points come in. Since prices seem to be stuck on the previous support level, it means that it may have turned to a resistance level. The next support level, therefore, is at S2, which is where we should put our take profit. Also as a precaution, our stop loss level should be just above S1, just in case prices break through it. (Breakout trading strategies)
Since this is a scalping technique, you don’t want to waste any pip movement, so you should have the Forex calendar close by, just in case any news breaks.
Download XXL scalping technique indicators
There are other ways you can use the Semafor indicator besides this, and here’s how:
