Scientific forex is a forex trading strategy that is specially developed to trade in the foreign exchange market. Scientific forex system generates the trading signal on the basis of various mathematical calculations and the signals are verified by various indicators. It is very rational approach of opening a position in the market so it is called scientific forex. Scientific forex is a trend following strategy so this system works best on the trending market rather than in the flat or sideways market. One should not be confused between a trending market and the correction market. An upward corrective market on the 4 hour chart might be uptrend market on the 5 minutes chart. One should be careful in such types of scenarios. For finding out the major trend of the market for trading daily chart is recommended. The trend that is seen on the daily chart can be considered as a major trend of the particular pair.
Scientific Forex is a simple trading strategy but its application is for both the amateur traders and the experts. Both types of traders can use this strategy for enhancing profitable trading. This system can be used on any time frame but the time frames below than 15 minutes are not recommended since the market is too choppy on those time frames. However, you can trade any pair.
Scientific Forex consists of four technical indicators but we will consider only three of them.
- Parabolic SAR: Parabolic SAR is a dotted line that is formed above and below the price chart. It is a technical indicator. Our main trading signal will be generated by the parabolic sar in scientific trading forex system. It is purple in color.
- RSI: RSI stands for relative strength index. It is a customized RSI since it doesn’t look like the ordinary RSI. Generally RSI is used for spotting the divergence and to figure out the overbought and oversold territory.
- MACD: MACD stands for moving average convergence divergence. MACD can be used to know the direction of the market. When the MACD is hovering in the positive territory it indicates the bullish market while when the MACD is hovering in the negative territory it indicates the bearish market.
Buying Conditions Using Scientific Forex.
- Parabolic SAR should appear below the price chart.
- RSI should be above the level of 30.
- MACD should be in positive (or near the zero) territory.
- Place your stop just below the recent swing low.
- You should take your profits when the RSI comes down to touch the level of 50.
Selling Conditions Using Scientific Forex.
- Parabolic SAR should appear above the price chart.
- RSI should be below the level of 70.
- MACD should be in negative (or near the zero) territory.
- Place your stop just above the recent swing high.
- You should take your profits when the RSI rises higher to touch the level of 50.
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