Price Action Scalping EA Review – An In-Depth Analysis
The Price Action Scalping EA is an automated trading robot that utilizes price action analysis and scalping techniques to trade the forex markets. In this comprehensive review, we will take an in-depth look at this expert advisor to determine if it is worth the investment for forex traders.
Overview of the Price Action Scalping EA
The Price Action Scalping EA was developed by forex trader Patrick Nguyen and combines price action analysis with indicators like the RSI and Bollinger Bands to identify trading opportunities on the 1 minute and 5 minute timeframes. It is optimized for the GBPUSD, EURUSD, and USDJPY currency pairs.
Some key features of the Price Action Scalping EA include:
- Price action analysis to predict future price movements
- Integration of the RSI and Bollinger Bands indicators
- Pending orders to reduce spread impact
- No martingale or grid trading
- Small 3 pip stop loss on trades
- Trades the 1 minute (M1) and 5 minute (M5) charts
- Fixed or variable position sizing options
According to the developer, this combination of price action and indicators allows the EA to enter trades precisely at opportune market turning points. The EA is designed to be a low drawdown scalper that can generate consistent profits over time.
Extensive backtests of the Price Action Scalping EA have been conducted and published on the vendor’s website. The backtests analyze the performance of the EA across multiple currency pairs and timeframes over historical price data.
The key backtest for the EURUSD M5 timeframe shows impressive results with a 60% net profit and acceptable 18% max drawdown over a 1 year period. The backtest analysis shows a high percentage of winning trades and a solid profit factor of 1.5.
While backtest results should always be taken with a grain of salt, these initial results indicate that the Price Action Scalping EA has the potential to perform well in live market conditions. More backtest details can be viewed on the vendor’s website.
Live Performance Results
In addition to backtests, the vendor provides screenshots of the EA’s performance on a live trading account. After 3 months, the live account shows a gain of 265% on the EURUSD M5 chart.
However, there are no verified MyFXBook or FXBlue results available yet, so the long-term profitability of the EA in live trading is still unproven. It would be reassuring to see verified results over a 6 month to 1 year timeframe before making a purchase decision.
Strategy Logic and Trade Management
The Price Action Scalping EA enters trades based on the confluence of its price action algorithms, the RSI indicator, and Bollinger Bands. The specific entry logic is proprietary and not disclosed publicly.
Exits are managed through a 3 pip stop loss and also trailing stops to lock in profits as the market moves favorably. The tight stop loss ensures risk management on each trade. No martingale or compounding methods are used to recover losing trades.
The trade management features help maximize profitable trades while limiting losses. Though the EA is optimized for scalping the 1 minute and 5 minute charts, it can be adjusted for use on higher timeframes as well.
Ease of Use
The Price Action Scalping EA is designed to be simple to install and use. Once purchased, it can be easily added to the MetaTrader 4 or 5 platform by dragging it onto a chart.
The input settings only require configuring three variables – the currency pair, timeframe, and position sizing method. All other settings are optimized by the developer for out-of-the-box use. This simplicity allows even novice traders to use the expert advisor effectively.
The EA also includes variable position sizing options. You can choose between a fixed lot size or an automatic lot calculation method based on account balance. This allows the EA to be used effectively with accounts of any size.
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The EA is currently priced at $3,000 on the MQL5 marketplace. This is certainly on the expensive side for forex EAs. More established EAs with long track records of live performance can often be purchased for $200 to $500.
However, for traders with larger account sizes, the price may be reasonable if the EA can consistently generate profits and a good risk-adjusted return on capital over time. Less capitalized traders may want to consider a less expensive alternative or wait for a price reduction.
Pros and Cons
- Utilizes reliable price action strategies
- Integrates helpful indicators like RSI and Bollinger Bands
- Low 3 pip stop loss protects capital
- Trades higher probability M1 and M5 charts
- Good backtest results posted
- Easy to install and use
- Expensive compared to competitors
- No verified long term live results yet
- Short time frame trading requires monitoring
- Not optimized for higher timeframes
- Potential for over-optimization on backtests
Price Action Scalping EA – Final Verdict
The Price Action Scalping EA shows promise as a low drawdown forex scalping robot, but needs longer-term verified live results to validate its performance claims. The backtests and short-term live account results posted by the vendor are encouraging, but real-world trading often diverges from backtest simulations.
For traders willing to take a chance on its potential, the EA may be worth testing out in demo and small live accounts. Other traders may prefer waiting for a price drop or more performance proof before purchasing. While not a flawless EA, the Price Action Scalping shows potential for disciplined scalping on the 1 minute and 5 minute charts.