Trading forex on the 15-minute charts is a good middle ground between short and long-term trading, which makes it a popular timeframe for day trading. There can be too much noise on the 1-minute charts and 5-minute charts, whereas signals are less frequent on the 1-hour charts and above. There are many different 15-minute forex strategies that you can choose from, whether trading reversals or trend trading. Here I will be taking a look at some of the pros and cons of trading the 15-minute charts along with a couple of strategies you can use for inspiration.
15-minute forex trend strategy
To start with, lets take a look at a trend trading strategy for the 15-minute charts. What we will first do is identify the direction of the trend using a moving average. We will then look for a pullback towards the moving average and a continuation of the trend for our entry point. Stop loss can be placed either side of recent support or resistance and we can exit once price crosses the other side of the moving average.
15-minute forex trend strategy buy signal
- Price is above moving average (50)
- MACD main line is above the signal line
- ADX main line is above 20
- ADX +DI is above -DI
- Price breaks recent resistance level
- Stop loss below recent support or MA (optional)
You can see from the EUR/USD 15-minute chart below that all of the above conditions were met. Price was above the 50-period moving average and break through recent resistance. I use a 50-period SMA as I find the default 14-period on the 15-minute charts to be too sensitive. The ADX (14) and MACD (12,26,9) confirmed upward momentum whilst there was a bullish spinning top candlestick pattern. This trade had a potential of over 300 pips.
15-minute forex trend strategy sell signal
- Price is below moving average (50)
- MACD main line is below the signal line
- ADX main line is above 20
- ADX -DI is above +DI
- Price breaks recent support level
- Stop loss above recent resistance or MA (optional)
On the GBP/USD 15-minute below, the conditions for a sell signal were met. Price was below the 50-period moving average and breached the recent support level. The MACD crossover of the main line and signal line happened as did the ADX crossover of the -DI and +DI. The ADX was above 20 suggesting good downwards momentum. There was also bearish price action including the three black crows candlestick pattern. Stop loss could have been placed above the 50-period SMA which would have been around 40 pips. The market moved over 300 pips so this would have been a good trade. We could have exited when price crossed back above the moving average and used that for a trailing stop.
15-minute forex reversal strategy
Following on from the 15-minute trend trading strategy, lets now take a look at a forex reversal strategy. This time we will want to look for ranging market conditions and enter a sell position when the market is overbought or a buy position when the market is oversold.
15-minute forex reversal strategy buy signal
- ATR is below 20 pips
- Price is around lower Bollinger band
- CCCI is in oversold area
- Reversal candlestick formation
- Stop loss just below recent support or lower band (optional)
- Exit on middle or upper Bollinger band (optional)
You can see from the GBP/USD 15-minute chart below that the average true range indicator (ATR) is below the 20 pips level which suggests that the market is ranging. The commodity channel index indicator (CCI) is showing oversold market conditions and price is around the lower Bollinger bands. There are doji candlestick patterns suggesting market indecision. You can see there was a few opportunities to take some good trades where stop loss could have been just below the lower Bollinger band and exit could have been near the upper band.
15-minute forex reversal strategy sell signal
- ATR is below 20 pips
- Price is around upper Bollinger band
- CCCI is in overbought area
- Reversal candlestick formation
- Stop loss just above recent resistance or upper band (optional)
- Exit on middle or lower Bollinger band (optional)
In the GBP/USD 15-minute chart below, you can see that the ATR is below 20 pips and price reverses from the upper Bollinger band area a few times. The CCI is in the extreme zone suggesting an overbought market. There is resistance that is holding up and bearish price action. We could again use the opposite Bollinger band for an exit point and place stop loss just above the recent resistance level or upper band. In theory, we could have traded bot long (buy) and short (sell) trades in this range which would have gave us some good trades over a short time period.
15-minute forex strategies Pros & Cons
Pros
- Lots of ways in which you can trade
- Can use any combination of indicators
- Price action contains more data than lower timeframes
- Can catch some good moves
- Less time needed to watch charts
Cons
- Still lots of false signals
- Requires lots of practice
- Signals are open to interpretation
Conclusion: should I use a 15-minute forex strategy?
If you are a forex day trader and have plenty of time to dedicate to analysing the charts, then the 15-minute timeframe could be a good choice. This is because you will not have a shortage of opportunities whilst you can avoid some of the market noise from the lower chart timeframes.
However, with so many different technical indicators, price action analysis and fundamental analysis to choose from, you will need to find a combination that works best for you. Not to mention, the success that you have trading forex on the 15-miunte charts or any other timeframe for that matter, is likely to depend on your money management and trading discipline.
I have seen the exact same forex strategies give a completely different set of results due to trades using different risk to reward ratios. I would always try to look for positions that present a favourable risk to reward ratio of at least 1:3. I might lock winning position in at break even and use a trailing stop to maximise each move.
Overall, if you want to use a 15-minute forex strategy, then you could start on a free forex demo account. You can get them from most forex brokers, including IC Markets who have tight spreads and rapid execution speeds which is important when trading the lower timeframes. Once you start seeing some success with your trading, you may then consider making the switch over to a live account.
Self-confessed Forex Geek spending my days researching and testing everything forex related. I have many years of experience in the forex industry having reviewed thousands of forex robots, brokers, strategies, courses and more. I share my knowledge with you for free to help you learn more about the crazy world of forex trading! Read more about me.
