In today’s Trading Beacon tutorial, we will cover a simple 50 pips a day Forex Scalping Strategy for the 1 minute chart (1 min) that is suitable for 2020, 2021 and beyond.
Forex scalping strategies are used by both beginners with small accounts, and also advanced traders with larger accounts alike. We’ll be going over a simple forex scalping strategy that works for both the 1 minute and 5 minute timeframes.
The secret is that there is no forex trading strategy that works every time, but for a strategy you can begin testing and implementing into your own trading, tune into today’s video.
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Here we have a 1 minute chart of the dollar yen. We have a fairly strong key level here that was formed on the 15 minute chart. Notice how price responds as it moves up to this level.
We have a short term area of resistance on the left, with two rejections. We pull back, and begin forming a pattern of higher highs and higher lows as we move back up to this level. We then break through resistance on these bullish candles here. Now remember: When a level of resistance is broken to the upside, it can often turn into support when we pull back into it. That’s exactly what happens in this example. As we pull back into this level, selling pressure slows down. The red bearish candles get smaller, and they reject the area of resistance now turned support. We then see a green bullish engulfing candle, closing above the 2 previous red candles. Price then continues moving higher.
As we get closer to the 15 minute key level I want you to pay attention to how price is moving. Now not many traders are aware of this, but the way price moves BEFORE it reaches a level of support or resistance can actually impact how likely it is the level will hold, or how likely it is the level will break.
Let’s say we have 2 levels of resistance in two different trade examples.
In the first example, we have a market that is steadily forming a pattern of making higher highs and higher lows. We have extensions to the upside, followed by smaller pullbacks to the downside as price move up.
It keeps moving in this way until it reaches the level of resistance.
In the second example, we have a market that is consolidating well below the level of resistance. Eventually we see a sharp breakout and price moves directly upwards. It keeps moving up, without seeing any pullbacks along the way, until it reaches the level of resistance.
When we see price movement similar to the first example prior to reaching a level of resistance, then that level is far more likely to break. Whereas when we see price movement similar to the second example, the level of resistance is far more likely to hold.
Foreign exchange trading on margin carries a high level of risk and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to invest in foreign exchange you should carefully consider your investment objectives, level of experience and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and, therefore, you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading and seek advice from an independent financial advisor if you have any doubts. Past performance is not indicative of future results. The information presented today is not meant for use in live trading.
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