This article will provide traders with a detailed explanation of the Forex 1-minute scalping strategy. During the course of this article, several topics will be covered such as EMAs, SMA, the advantages and disadvantages of the Forex 1-minute scalping strategy, and more!
Even if you’re a complete beginner in trading, you must have come across the term “scalping” at some point. Scalping in the foreign exchange market is a method of trading certain currencies based on real-time technical analysis. The main goal of scalping is to make a profit through purchasing or selling currencies by holding a position for a very short period of time, and closing it for a small profit. Without further ado, let’s dive right in and see what one of the most popular Forex scalping strategies – the 1-minute Forex scalping strategy – has to offer.
A Complete Guide to the Forex & CFD 1-Minute Scalping Strategy
A 1-minute scalping strategy is a good starting point for Forex beginners. However, you should be aware that this strategy will demand a certain amount of time and concentration. If you are not able to dedicate a few hours a day to this strategy, then FX 1-minute scalping might not be the best strategy for you. FX 1-minute scalping is a day trading strategy, as it involves opening a certain position, gaining a few pips, and then closing the position afterward. It is one of the most basic and resourceful trading strategies. The main aspect of Forex scalping is quantity. It is not unusual for traders to place more than 100 trades a day. For this reason, it is important to pick a broker with the smallest spreads, as well as the smallest commissions.
Now let’s turn our attention to the strategy validity, time frame, indicators, and sessions:
- The validity of currency pairs – every currency pair
- 1-minute time frame
- Necessary indicators: Stochastic 5, 3, 3, and 50 EMA, 100 EMA* (available on MetaTrader 4)
- Preferred sessions: London, New York – high volatility
EMA stands for “Exponential Moving Average“, the second most popular type of moving average after the Simple Moving Average (SMA), except for the fact that more importance is given to the latest data. We recommend you to explore the entry points and the necessary stop-loss levels on your trading terminal. Why not attempt this with our risk-free demo account? And see if this strategy works for you!
It is important to broaden your understanding of the market. By trying different approaches, you can view your strategies from a new perspective, and gain valuable insight into the inner mechanics of trading. Even if it doesn’t work out for you, the risks are very low. The essence of the strategy will not allow for high losses or high gains for that matter. Make sure you are familiar with risk management and learn the best-practice risk and trade management for successful Forex and CFD trades.
FX 1-Minute Scalping Strategy Purchase (Long) Entry Point
The first EMA (50) must be positioned above the second EMA (100). When this has occurred, it is essential to wait until the price comes back to the EMAs. In turn, the Stochastic Oscillator is exploited to cross over the 20 levels from below. The moment you observe the three items arranged in the proper way, opening a long (buy) order may be an option. To stay safe, stop-losses are vital. Stop-losses are arranged around 2-3 pips, just below the last low point of a particular swing. As the 1-minute Forex scalping strategy is a short-term one, it is generally expected that you will gain between 8-12 pips on a trade. Hence the take-profits are best to remain within 8-12 pips from the entry price.
FX 1-Minute Scalping Strategy Sell (Short) Entry Point
The first EMA (50) should be positioned below the second EMA (100). As with the buy entry points, we wait until the price returns to the EMAs. Additionally, the Stochastic Oscillator is utilized to cross over the 80 levels from above. As soon as all the items are in place, you may open a short or sell order without any hesitation. The exact same things occur here. Stop-losses are positioned near 2-3 pips below the last low point of the swing accordingly, and take-profits should remain within 8-12 pips from the entry price.
The Pros and Cons of 1-Minute Scalping Strategy
In order to determine whether Forex scalping and Forex 1-minute scalping may prove useful for your type of trading, we are going to delve into the pros and cons of scalping.
First, the pros:
- Less risk exposure, brief exposure to the market reduces the possibility of running into inauspicious events.
- Relatively small movements are easier to achieve, this implies that a larger supply and demand imbalance is required to ensure bigger price changes.
- The main logic behind scalping is that smaller moves occur far more frequently than larger ones.
- Even when the markets are comparatively quiet, a good Forex scalper can utilize many small moves.
Now, these pros might sound quite tempting, but it is important to look at the disadvantages as well:
- A large deposit is needed.
- Bankers and dealers have a certain advantage over amateur scalpers as they possess more information about the market.
- A 1-minute scalper requires quick reflexes, good instincts, and mathematical skills.
- It can be difficult to scale and maintain a good risk/reward ratio. For instance, with a ratio of 2:1, your take-profit at 10 pips requires a stop-loss at 5 pips, making it too close not to get stopped out in the majority of cases.
- 1-minute scalping is time-consuming and may lead to stress.
Scalping proves to be an extremely effective strategy – even for those who use it purely as a supplementary strategy. The same goes for Forex 1-minute scalping. However, it is important to understand that scalping is hard work. Scalpers are rewarded for quantitative work – the more Forex scalping they perform, the larger the profits they achieve. In the end, the strategy has to match not only your personality but also your trading style and abilities