The Ama Bands Scalping System is among the best scalping trading system there is for trading forex. It was developed back in 2014 and it is still very valuable to Forex scalpers today. It is quite a profitable scalping strategy and recommended even to forex beginners.
For maximum profits, the Ama Bands Scalping System should be used to trade using the 5 minutes timeframe. Also, the trader should confine him or herself to using this scalping strategy for trading the EUR/USD and the GBP/USD currency pairs only.
Fig.1. Ama Bands Scalping System.
This scalping system incorporates a combination of two indicators to provide signals for scalpers. These indicators are the Ama Bands (9, 30, 2) indicator and the 5 minute char indicator.
Understanding how the indicators used in Ama Bands Scalping System work
It is important for the trader to understand how the two indicators used in this scalping strategy works so that the trader can be able to easily interpret the signals given. The accuracy of the trade actually depends on how well the trader can interpret the signal given by the indicators. The interpretation also helps the trader in knowing when to close the order so as to minimize large losses.
- Ama Bands (9, 30, 2) indicator
The Ama Bands (9, 30, 2) indicator generated bands within the main trading chart. It is a trend indicator and thus show the direction of the market price trend helping the trader to trade in the direction of the trade.
It has purple and aqua lines which form bands along the candlesticks. There is a center purple line that which act the signal provider. When the candlesticks gets below the center the trader should be ready to sell. When the candlesticks gets above the center line, the trader should be prepared to buy.
The indicator is also responsible for producing arrows along the center purple line showing the direction of the trend. The arrows are aqua or brown n color. When the arrows are aqua, the trend is up, and when they are brown the trend is down. But the signals of the two indicators have to be similar for the trader to place an order.
- 5 minute char indicator
This indicator is displayed on a separate chart below the main trading chart. It is a trend indicator and thus tells the trader when a trend begins to when it ends.
It has a line that changes color as it changes directions. When the color of the line is white, the trader should be ready to sell since the indicator is showing a down trend. Likewise, when the color is aqua, the trader should be ready to buy since the indicator is showing an uptrend. But the signals of the two indicators have to be similar for the trader to place an order.
How to trade using the Ama Bands Scalping System work
The trader should always trade in the direction of the trend shown by the indicators. to confirm the trend, the trader should load the 15 minutes timeframe chart.
- Placing a buy order
A buy order is placed if in the 5 minutes and the 15 minutes chart, the 5 minute char indicator is blue and the candles sticks are below the center line of the Ama bands indicator and that the arrows being produced are aqua in color.
- Placing a sell order
A sell order is placed if in the 5 minutes and the 15 minutes chart, the 5 minute char indicator is white and the candles sticks are above the center line of the Ama bands indicator and that the arrows being produced are brown in color.
Fig.2. Placing orders using the Ama Bands Scalping System.
Exiting a position
The trader should exit when the 5 min chart indicator change direction or on the pivots points levels.
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