Scalping with Fibonacci Retracement: A Forex Trend Action Strategy

This strategy revolves around waiting for a trend to initiate and confirming its presence on a 60-minute timeframe. Subsequently, traders transition to the 5-minute chart and anticipate a retracement using the Fibonacci retracement tool available on TradingView.Time Frame: 5 minutes, Currency Pairs: GBP/USD, EUR/JPY

Indicators

55 EMA

MACD (4,9.6)

Buy

The closing price must be above the 55 EMA on the hourly chart.

The closing hourly candlestick must be bullish.

The MACD bar should exhibit a positive divergence or a higher low bar.

If all criteria align, switch to a 5-minute chart.

Scenario A: Search for a 38% or 50% Fibonacci retracement (support) from the recent swing low on the hourly chart. Initiate a long position if the candlestick dips below but closes above the retracement level (either 38% or 50%); set the stop loss at 61.8% or the recent swing low if your risk for trade permits.

Scenario B: If the price action doesn't retrace to the 38% level, open a long position upon the break of the previous hourly candle's high; set the stop loss at 61.8% or the recent swing low.

Sell

The closing price must be below the 55 EMA on the hourly chart.

The closing hourly candlestick must be bearish.

The MACD bar must cross below the Signal EMA on the hourly chart, with a red color.

If all conditions align, switch to a 5-minute chart.

Scenario A: Look for a 38% or 50% Fibonacci retracement (resistance) from the recent swing high on the hourly chart. Establish a short position if the candlestick dips below but closes above the retracement level (either 38% or 50%); set the stop loss at 61.8% or the recent swing high if your risk per trade allows.

Scenario B: If the price action doesn't retrace to the 38% level, open a short position at the break of the previous hourly candle's low; set the stop loss at 61.8% or the recent swing high.