Volcano Scalping Trading System strategy was manly inspired from Guppy Moving Average and some other rainbows trading approach. In addition, there is another indicator called VolcanoWMA that provides the arrow and alert signal. The strategy determines the trend with the WMAs and enters the trending market using the VolcanoWMA indicator at the best timing.
Timeframes: 1 Minute
Currency pairs: EURUSD
Trading sessions: ANY
Period: 40 to 60 and 90 to 120
MA method: Linear Weighted
Apply to: Close
Vice versa, we open a buy order when there is an up arrow, and all the WMA lines has an upward slope, and the blue WMA lines are stretched and the green / pink WMA lines are compressed as shown in the following picture.We open a sell order when there is an down arrow, and all the WMA lines has an downward slope, and the blue WMA lines are stretched and the green / pink WMA lines are compressed.
As it is a scalping strategy, so the takeprofit and stoploss are small in which the takeprofit is 10 pips and the stoploss us 10 pips as shown in the following picture.
This is a trend following strategy in which it has a lower risk as compared to strategy that trade on sideway market and retracement market. his strategy does not work well whenever there is a reversal of trend.