The intraday EURUSD M5 timeframe trading strategy based on divergence accumulation, as its name implies, is created to trade on the EURUSD currency pair, beloved by many traders. The system is trending and catches signals on trend pullbacks. The strategy is based on the search for divergence between price values and the values of the Accumulation/Distribution (A/D) indicator.
The A/D indicator is available for download on our website in the Indicators section.
The A/D indicator is an indicator of the accumulation of capital distribution in an asset. It has no input parameters and does not require settings.
Terms for BUY deal
1. The upward trend is clearly visible on the EURUSD 5-minute chart.
2. When the price rolls back, new local lows are formed.
3. At the same time, the indicator line does not form new lows but begins to show an upward movement. This is the divergence between the values of the price and the indicator. At this point, you can open a long position.
Terms for SELL deal
As well as for long positions, the conditions for the sell are the same but with the opposite values.
Stoploss and Takeprofit
This trading strategy uses predefined stop-loss and take-profit. Knowing the average volatility indicators for a given pair on the 5-minute timeframe, the following values are derived for it: Stoploss is always set at a distance of 200 points (five-digit) from the position opening price. Take-profit is placed at a distance of 300 points from the opening price.
The secret to the successful operation of the EURUSD M5 divergence accumulation strategy largely depends on how correctly and accurately the trader can determine divergence using the Accumulation/Distribution indicator. A trader who learned to accurately identify divergences in this trading strategy should think about its application in other currency pairs. The difference will be only in the sizes of stop-loss and take-profit, which can be independently derived through experiments.
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