Scalping 4H Range + 50%

This strategy is designed to capture high-probability reversals by exploiting "fakeouts" and liquidity sweeps that occur after the market's initial opening range.

How it Works:

The Range: The indicator automatically defines the High and Low of the first 4 hours of the trading session (typically the Asian/London overlap or New York Open).

The Setup: Instead of chasing breakouts, this strategy waits for a Failure to Break. It monitors for price to break out of the 4-hour range and then immediately close back inside.

The Signal:

BUY Signal: Price breaks below the Range Low (sweeping liquidity) but closes back inside the range.

SELL Signal: Price breaks above the Range High (sweeping liquidity) but closes back inside the range.

Trade Management:

Target: Trades target the opposing side of the range (e.g., a Buy at the Low targets the Range High).

Stop Loss: Placed at the extreme wick of the fakeout move to ensure a tight risk profile.

Equilibrium: A 50% Mid-Range line is provided to help secure partial profits or adjust stops to Breakeven.

How to Use This Indicator

1. Chart Setup

Timeframe: This strategy is optimized for the 5-Minute (M5) timeframe.

Asset Class: Works best on volatile pairs (Indices like US30/NAS100, or major Forex pairs like EURUSD/GBPUSD) where liquidity sweeps are common.

2. Session Configuration

Go to the indicator settings.

Session Input: Define the first 4 hours of your trading day (e.g., 0000-0400 for the New York midnight open or 0800-1200 for the London Open).

Note: The indicator automatically highlights this background in blue. No trades are taken during this formation phase.

3. Understanding the Visuals

Red Line: Range High (Resistance).

Green Line: Range Low (Support).

Grey Dotted Line: Mid-Range (50% Equilibrium).

4. Trading Rules The strategy does not trade breakouts; it trades false breakouts (fakeouts).

BUY Signal:

Price breaks below the Green Line.

Candle closes back above the Green Line.

Entry: On the close of the signal candle.

Stop Loss: Below the lowest wick of the breakout move.

Take Profit: Target the Red Line (Range High).

SELL Signal:

Price breaks above the Red Line.

Candle closes back below the Red Line.

Entry: On the close of the signal candle.

Stop Loss: Above the highest wick of the breakout move.

Take Profit: Target the Green Line (Range Low).

5. Management (Mid-Range)

When price hits the Grey Dotted Line (50%), it is recommended to move your Stop Loss to Breakeven or take partial profits.

Disclaimer: Trading involves a high risk of financial loss. This tool is provided for educational purposes only and does not constitute investment advice. Use of this tool is at your own risk. Pirate Pips ™ is not responsible for any losses incurred.