Scalping Trading Strategy
In the scalping trading strategy, we set some indicators so that we can get quick entry and exit signals.
If you are in trading momentum, you can scalp the move on the way up.
In this way, scalping can protect against the risk of exiting the position too early because you had made the profit on the way.
A scalping trading strategy also works well during periods of consolidation, when the price is bounded within a range.
Price generally moves in the channel in getting a trend.
The scalper has the best opportunity to trade in a parallel channel, whether a side-channel or trending channel.
Targets should be acceptable in a 1:1 risk-reward ratio in scalping trading strategy.
One minute and five-minute charts are utilized for scalping trading strategy.
A set of five-period exponential moving average and five-period smoothen moving average is used on one minute or five-minute chart in scalping trading strategy.
Analyze the trend on the five-minute chart and trade accordingly at the one-minute chart.
In five minute chart, prices are moving in an uptrend, and we should trade on only the uptrend on one minute chart.
When prices are sideways on a five-minute chart, on one minute chart, we can buy when five EMA crosses the five SMMA.
RSI should be above 50 levels, and the Bollinger band is moving towards the upside.
Similarly, we can sell the stock when 5 EMA crosses down the 5SMMA.
RSI is below 50, and the Bollinger band is moving downward side.
Set your stop-loss at the low of the preceding candle, before the crossover in buy position and high of the candle before the crossover in short sell position.
The risk-reward ratio is 1:1 and 1:2 and exit according to your risk-reward balance.
When prices are trending in a 5-minute chart, you can shift your stop loss to the break-even point to get the maximum of this move.
In this chart, between these two red lines, prices are moving in sideways channel and Bollinger band is also moving sideways, so we can trade in both the direction on one minute chart.
When 5 EMA is below the 5 SMMA, and RSI is below the 50 levels, the Bollinger band goes downwards.
So we can make our short sell position.
We will set our stop loss at the high of the before crossing over the candle.
I recommend trading this scalping trading strategy on a 1:1 reward ratio.
When the Bollinger band is moving sideways in one minute chart, we ignore all the signals.
When RSI is above 50 levels, do not enter the short sell position.
When RSI is below 50 levels, do not enter the buying position.
To trade the scalping trading strategy , you have to be satisfied with these three rules, they are,
5 EMA and 5 SMMA cross over should be happening.
If you are on buying side, RSI should be above 50 levels, and If you are towards the selling side, RSI should be below 50 levels.
While trading in one minute chart, the Bollinger band should be sideways on the 5-minute chart, and if you are towards buying side, the Bollinger band should be on an uptrend towards the upper side, and if you are towards the selling side, the Bollinger band should remain in a downtrend.
After the movement of sideways Bollinger band in the 5-minute chart, if the prices are moving in uptrend and Bollinger band is also in the uptrend.
So, in this case, on one minute chart, we focus only on buying position.
After taking buying entry in one minute chart, our target should be 1:2 and more, and my suggestion is the trailing stop loss.
But we will quickly exit our long position when moving average gives the exit signal.
We can exit the trade with the help of the RSI level and Bollinger band contraction also.
We should shift our stop loss level instantly in the scalping trading strategy because our target levels are minor.
For example, in any of the stocks you have selected, you have to see the direction of the Bollinger band in the 5-minute chart.
If the Bollinger band is expanding and going upward, we will make only buy position in scalping trading strategy on a one-minute time frame.
If the opening candle has gapped up, we have to wait for a clear direction of the stock.
How To Pick The Stocks For Scalping Trading Strategy ?
While trading scalping trading strategy, I always choose the stock with the l
Average volume should always be more significant than 100k because we want the higher volume of the stock to move.
We should not always be stuck with moving fewer stocks.
For the Scalping trading strategy, observation of the candlestick patterns is more important for the trade probability.
Catalyst is an essential character to be considered for day trading.
With a strong catalyst, a stock can move 10 to 15 % in a single day.
If a catalyst is a negative side for the stock, it will fall.
If a catalyst is positive for the stock, it will rise.
But for some time, a single catalyst behaves as negatively and positively for the different stocks.
For example, there was news in the market for merging three banks like Bank of Baroda, Vijaya Bank, and Dena bank.
The next day, Baroda and Vijaya bank had opened the gap down, and Dena bank had opened in the gap-up.
The same catalyst is acting both negatively and positively at the same time for different stocks.
You can scan the stocks based on the news for the gap up and gap down strategies.
Scalping trading strategy are the most probable and profitable, and they may give a 1:2 and 1:3 risk-reward ratio.
Only one tool that will be helpful for the intraday scalping trading strategy is a screener.
Stock screeners will be available in the trading view platform most accurately.
For intraday scalping trading strategy, a 5-minute time frame is used to predict the stock direction.
You have to mark the RSI levels in the chart before taking the trade.
I recommend large-cap trading stocks because an individual can’t manipulate the scrip, and the movement will be based on that stock’s news and financial status.
Scalping trading strategy will work with the combination of indicators like
- Moving average
- Bollinger band
How to Trade in stock Intraday with the help of Moving Average: Scalping Trading Strategy
Trading by using the moving average will be accurate
Enter the long trade, when a cross-over of moving average takes place towards the bullish side.
And your stop loss should be the day low.
And your target would be according to your risk-reward ratio.
Enter the short trade when a cross-over of moving average takes place towards the bearish side.
And your stop loss should be the day high.
And your target would be according to your risk-reward ratio.
I suggest the 5 minute time frame for the intraday traders.
How to Trade in stock Intraday with the help of Bolinger Band: Scalping Trading Strategy
Bolinger band will give the early signal, whether the market is moving towards the bullish side or bearish side.
If the Bolinger band is in a narrow position, that means contracting, and the signal is that market is in consolidation mode, so do not enter any trade while the market is in consolidation mode; wait for the scrip for picking movement.
The signal of whether the market is picking movement is, our indicator Bolinger band will expand, or it will show some expansion moment.
You can enter the trade after the expansion of the Bolinger band.
Remember Bolinger band will show whether the market is in bullish mode, consolidation mode, or bearish mode.
When the 5-minute candle has opened outside the Bolinger band, that trade will not be much effective.
Trade will be effective when the candle stays on the inner side of the Bollinger band.
I will trade when the candle is on the inner side of the Bollinger band.
I will avoid trading when the candle opens outside the Bollinger band.
How to Trade in stock Intraday with the help of Relative strength index (RSI): Scalping Trading Strategy
The relative strength index will be helpful to take the trade or exit from the market.
RSI will confirm to take the trade or exit.
If the RSI level is above the value of 50, then it is the most probable of entering the buy trade.
If you had entered the trade above the RSI 50 level, In the middle of the market, if the value of the RSI drops below 50 (It will occur in rare cases), In that case, the trade may not perform most accurately.
Remember one thing; all indicators will show the direction of the market.
These types of trades will be more practical and most probable.
If you are interested in taking these types of most probable trades, you may contact us to be a profitable and most probable trader.
These are the only samples.
The original program will be in our private groups and our course.
I am not a trainer; in the stock market, there are no trainers; all are learners.
IN TRADING, ALL ARE PROBABILITIES.
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