Two moving averages and the standard MACD produce a setup where you can find your point of entry with an expectation that the market is ready to move. In this lesson, I will show you when and how to do it on a 5-Minute chart. This is a reliable strategy for finding a profitable trade several days a week and it only requires about 30 to 90 minutes of your time. Everything you need to trade this strategy is freely available on most charting platforms.
What’s a Combo-Hopper?
The Combo-Hopper is a setup for trading involving the Combo Method of tracking repeatable patterns with 2 moving averages, and using a signal for timing momentum from the MACD (Moving Average Convergence Divergence) indicator. These technical indicators are free.
What makes this strategy successful?
Time of day: Business happens during business hours. That’s why it’s important to trade during the active business hours. In the U.S. there is a often a wave of momentum affecting the EUR/USD currency that starts at 10:00 am Eastern Time.
Moving Averages: In the Combo Method of tracking trends and ranges, I use the 50 and 100 simple moving averages. The position of current price in relation to these 2 moving averages tells me where the market is in the process of moving from trends to ranges to trends again. This is a special setup because it doesn’t matter if it’s in a range or a trend. Either way, when price is in the Combo-Hopper position, I know it is likely to move far enough for me to collect profit, whether it continues on to trend or eventually reverses back into the range.
Timing: When the MACD crosses zero, it’s a “Hopper”. When the Hopper happens, I can see the starting (and ending) point for momentum.
Step By Step Combo-Hopper For 6Pips
Step 1: Setup The EUR/USD 5-Minute Chart.
EUR/USD 5-Minute time frame chart with 50 and 100 simple moving averages, and a standard MACD.
Combo-Hopper Chart Setup
Step 2: Time of day.
I expect 2 waves of momentum during the active U.S. session. The first is unpredictable because there is over-lap between the first half of the trading day in Europe and the beginning of the day in the U.S. The second wave of momentum starts at 10:00 am most days. Look for your setup to start between 10:00 and 11:00 a.m. Your profit target should be reached within about 20 minutes of the trade opening.
Step 3: When to open the trade.
The idea of this trade strategy is to pick up a piece of the action, when the action starts! We know the market is likely to move at 10:00 am. Make sure price is in position near the moving averages, and more importantly, make sure MACD is just getting ready to cross zero.
If those 3 things are lining up, get ready to open your trade.
Step 4: When to close the trade.
Set your profit target to 6 pips. If the market has begun to move with this anticipated second wave of momentum, then your trade should find its way to profit within a few of bars (or about 20 minutes). Alternatively, you can set your profit target to a higher amount, and take whatever the market gives within about 1 hour of time. The point is to capture at least 6 pips, which should be easy to do several days a week.
Stop loss can be placed on the opposite side of the 50 sma.
MACD starts and ends the trade.
Open the trade when the MACD crosses over zero as close to 10 a.m. as possible. If, at any time, the MACD goes back over zero against your open trade, immediately close the trade. The MACD is the signal that got you into the trade, and it’s the signal that ends it too.
Examples of Combo-Hopper Trades For 6 Pips