Donchian Channel Breakout Forex Magic Scalping System. Magic Scalping trading system is based on a wave reversal trading strategy. That means, instead of following the trend, we are going to follow the waves within the trend and trade when reversals happen.
Before we start using the system we should install it first. To install the indicators, copy them to :
- windows/program files/metatrader4/experts/indicators.
To install the template, copy it to :
- windows/program files/metatrader4/templates.
Then restart Metatrader.
If the system is installed correctly, here is how your chart should look like:
With this system, we’re going to use 4 indicators…
- First indicator is super signal’s channel. This indicator identifies highs/lows of
Red arrow = sell signal
Blue arrow = buy signal
- Second indicator is arrows and curves indicator, this indicator is used to confirm the first indicator’s signal. Small Red arrow = sell signal, Small Blue arrow = buy
- Third indicator is non lag zigzag indicator. This indicator – similar to super signals – identifies the highs/lows of current wave.
Last indicator used by the system, is the AO indicator.
Red bar below 0 line = sell signal
Blue bar above 0 line = buy signal
- 1 – Blue Arrow
- 2 – Small Blue Arrow
- 3 – Buy signal from zigzag
- 4 – AO blue bar above 0 line
- 1 – Red Arrow
- 2 – Small Red Arrow
- 3 – Sell signal from zigzag
- 4 – AO red bar below 0 line
For additional – optional – confirmation signal, we can use price pattern called the ‘’Pin Bar’’.
The pin bar means that the price is going to move in the opposite direction to where the nose is pointing. In Figure 1 the nose is pointing up so the trader should expect prices to move down.
A pin bar must:
- have open/close within the first eye, protrude from surrounding prices (‘stick out’ from surrounding prices); it
- Cannot be an inside bar.
A good pin bar has:
- A long nose (and a long nose relative to the open/close/low),
- A nose protruding a long way from the prices around it (it ‘sticks out’),
- The open / close both near one end of the bar
Please note that this system works with all time frames and currency pairs. But it’s highly recommended to be used with major pairs and 15 Minutes chart and higher frames.
For stoploss, we will be using the last high/low from the last arrows signals.
For targets you can use 2 strategies.
- 1st strategy, you can use a trailing stop without specific target. For example, after opening a trade you can set a trailing stop of 10 pips. And let the trade be closed automatically.
- 2nd strategy, is to use a specific target. In this case, and like all scalping systems the target should be from 3 to 10 pips max.
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