Scalping is known to be one of the most difficult ways to trade on the market. Many traders who tried scalping lost money. On the other hand, many also made a fortune with scalping.
Scalping is a bit more difficult to trade, but it's probably not entirely due to the nature of the lower timeframes. Sure, there is a bit more noise in the 1 minute timeframe and setups are easily voided by major market drivers, but these things are only part of the reason why traders lose money scalping.
One of the main reasons why traders lose money when scaling markets is lack of analysis. Because of the speed of scalping and the limited time it takes for traders to make a decision, traders often skip market analysis and make rash decisions. The key is to have tools that you can use to analyze the market without taking too much time.
Support and resistance on the 1 minute chart
Supports and resistors are powerful techniques and tools for analyzing the market. These are areas or price points on the chart where the price can either bounce off or break out. For some reason, however, it is rarely used on the 1-minute chart. You probably think that these supports and resistances won't work due to the noise in the lower periods, but you'd be surprised at how effective they are if they are included in your trading strategy.
Trading strategy concept
For this trading strategy, we will use one of the most basic methods to draw support and resistance – swing lows and highs to draw horizontal support and resistance.
As swing lows and highs are earlier turning points on the price chart, the market will take note of these areas. The advantage is that horizontal supports and resistors, unlike diagonal supports and resistors, are accurate prices so traders can set pending orders for these areas.
Since we are trading in the 1 minute period, the market will tend to exceed the supports and resistances, which can lead to breakouts. Our trading strategy We will trade the breakouts immediately and hope that the momentum and the pending orders will cause the price to outpace the supports and resistances by a few pips in our favor.
Since the analysis of the market and the drawing of supports and resistances in the time frame of 1 minute may be a bit too fast, we use an indicator that automatically draws horizontal supports and resistances.
Time frame: 1 minute chart
Currency pair: GBPUSD & EURUSD
Session: session in London and New York
Buy trade setup
- The last horizontal resistance should be drawn by the indicator in the table
- Set an outstanding buy stop order on the horizontal resistance
- Set the stop loss to 5 pips above the starting price
- Set the take profit to 5 pips below the starting price
Sell Trade Setup
- The last horizontal support should be drawn by the indicator on the graph
- Schedule a pending stop order on the horizontal support
- Set the stop loss to 5 pips below the entry price
- Set the take profit to 5 pips above the starting price
This strategy enables us to catch short momentum trades that take place due to breakouts. For this reason, we could assume that the price of some more pips will go in our direction. It is possible to have strong momentum breakouts and win 10, 15 or even 20 more pips in a single trade, but this is not always the case. The most common recurring case would be that the price could break out with a strong momentum candle for around 5 – 10 pips. This is the area you could play with, but to be conservative, we only aim for 5 pips.
There are also cases where, after the breakout candle, the price of some pips remains before we head in our direction. This is commonly known as a repeat test among price promoters. To take these events into account, we will use the 5-pip stop loss. That way we could have some leeway for the price that we can move with.
This strategy is a 1: 1 fixed reward risk strategy. This is not the best reward risk ratio, but it is feasible as long as we have a positive profit-loss ratio. In order to compensate for the low reward-risk ratio, this strategy enables a high frequency of trades. This could result in low averages and large numbers playing a role.
Installation guide for Forex Trading Systems
The SNR Fast Scalp Forex Trading Strategy is a combination of Metatrader 4 (MT4) indicator (s) and template.
The essence of this forex system is to transform the accumulated historical data and trading signals.
The SNR Fast Scalp Forex Trading Strategy offers the possibility to recognize various peculiarities and patterns in price dynamics that are invisible to the naked eye.
Based on this information, traders can accept further price movements and adapt this system accordingly.
Forex Metatrader 4 trading platform
- Free $ 30 to start trading immediately
- No deposit required
- Your account will be automatically credited
- No hidden terms
How do I install the SNR Fast Scalp Forex trading strategy?
- Download SNR Fast Scalp Forex Trading Strategy.zip
- Copy mq4 and ex4 files to your Metatrader directory / Experts / indicators /
- Copy the tpl file (template) into your Metatrader directory / templates /
- Start or restart your Metatrader client
- Choose the chart and time frame in which you want to test your forex system
- Right-click on your trading chart and move the mouse pointer over "Template".
- Move right to select the SNR Fast Scalp Forex trading strategy
- You will see that the SNR Fast Scalp Forex trading strategy is available on your chart
* Note: Not all forex strategies come with mq4 / ex4 files. Some templates are already integrated in the MT4 indicators of the MetaTrader platform.
Click here to download:
Snr Fast Scalp Forex Trading Strategy