How to scalp the forex market profitably: Strategy 1

Hello, good to have you, um, on this channel at this point in time. Um, in this video, I'm going to share with us a very simple scalping strategy that we can start using to become profitable in the financial market. In our quest to make profit from the market, some of us resort to scalping the markets, but we have not been able to lay our hand on a particular strategy that is very profitable and at the same time will still include a risk management strategy at the same time. So we are trying to still make money and at the same time we are still getting our accounts protected. So I'm here this day to share with us this very simple strategy that would be very profitable in as much as we can understand what it looks like and we can start utilizing it on our trades. This strategy works across all instrument classes. Maybe you are a currency trader, you trade the commodity asset class, or you are someone who trades the index or even the stock market. Any of the asset classes you trade, this strategy is for you, and you can start utilizing the strategy immediately. But we encourage us, before we use it on our real accounts, let us try it out and test it out on the demo. That's like backtesting the strategy so we can also get to know if there is something we might need tweak along the strategy, especially with respect to the kind of instrument we trade. So we get straight to business right away. And, um, preferably I would also want us to have a setup like what I'm currently having on my screen now. What I— what do I mean by that setup? A setup that allows us to have our candle colors different from the default settings. The default settings have different colors compared to this, but This way I've been able to tweak the colors to red, telling me that price is currently tending to the downside, and the green also informing me that price is tending to the upside. This kind of color, though it's not a way to analyze the market, helps me by just taking a look at the chart. I can have an idea as to where price is going easily compared to when I'm working with the default colors. That come with, um, the MT4. So for those of us that might not know how to, um, adjust the colors of our candles to reflect, uh, something similar to what I'm having on the screen now, or whichever color you would like to work with, uh, just move your cursor to around the trade panel. Uh, the trade panel is where you have your candles. Um, right-click on it and you go to Properties. So when you're on Properties, you can make the following adjustment. Adjustments that will suit you. So basically, this is the one that would work well with my strategy, and that's why I'm actually also going to be showing us the same setup for my candle colors. Straight down to the strategy, since I've shown us how to get to change the colors or the settings of our candles to also display the red colors and the green colors as I have it on my screen, um, at this point in time. Uh, the first scalping strategy I'm going to be sharing with us, because this is going to be a series of scalping strategies, this one is going to be the first, and subsequent videos will also be coming up on this channel. So it will be very good at this point in time for those of us that also want to get the notification any other time a new video is released, as you can just check at this time and subscribe to this channel so that anytime a new video is released on this channel you get to be notified and you can quickly have access to those new strategies as will be released on this channel. So this strategy utilizes 2 exponential moving averages, 2 exponential moving averages to help us to identify the trend on the instrument. Although sometimes if an instrument is really trending and has been trending for a particular point of time, it's easier for us to just get to take a look at our chart and we can get to see the general direction. But at some point when the trend is just building, it might be difficult for some of us to be able to get to identify that, oh, this is the right trend on this particular instrument, and based on the trend, this is the right kind of trade I should be looking at, um, taking at this point in time. So we are going to be using 2 moving averages, as I said earlier. Uh, the first moving average we would be utilizing is the 21 exponential moving average. The 21 exponential moving average, according to this strategy, is our fast moving average. You know, we want to scalp the market. We want to be able to enter into the market as many times as possible within a short time and be able to make as much as possible within those short periods that we are able to make our entries into the market. So our fast moving average for this strategy is the 21 exponential moving average, and the other moving average, which happens to be like our signal moving average, is going to be the 8 exponential Moving average. So we are using two moving averages: the 21 exponential moving average and the 8 exponential moving average. So how do I get to add these two moving averages to my chart? We identify this icon called the indicator list. It's currently displayed on my MT4, as you can see. So I go there, I click on the indicator list. Since I'm using a moving average, I can decide to go with this moving average. It's all the same, but Why want us to utilize, um, the trend? So we go straight to trend and then we pick moving average. So from trend I get to pick moving average and I make the following adjustment at the period. Since I'm using 2 moving average, I can start the settings from any of the 2, but let's start with the 8. That's the fast moving average, uh, so the 8, the MA method is going to be exponential and I'm going to apply it close And the style is going to be green. I'm using green based on the colors of my candles. Uh, yeah, so that's why I'm using green. So depending on the color of your candle, whatever color you are using to represent your bullish candle should also be the style you are using for this 8 exponential moving average. So once I am done, uh, based on these settings, I click on OK. So the first moving average is already added to my chart. So with this in mind, I go on to the indicator list since I need 2 exponential moving averages for this strategy. And then I go to Trend, I move to Moving Average the second time, and I adjust the period this time around to 21. And the style here, currently green based on my last setup, I change it to red. Red being the slow moving average of the 2 moving averages attached, or that is going to be used for for this strategy. So 21 exponential, apply to close, and the red. So since I'm done now, I click OK just this way. So with what I've just done at this point in time, we can see 2 moving averages waving across our charts. The moving averages would give us the triggers for our trades, and based on the strategy we are going to use today, it's going to help us to identify the trend on the instrument. Previously around this axis, we could see the red exponential moving average trading above the green. So at this point, when the red exponential moving average was trading above the green, the trend of the market at that time was bearish. Bearish meant that price was waving to the downside, or sellers were fully in charge in the market. That was what happened, um, at this point when the red exponential moving average was trading above the green. But currently, at this point in time, uh, we are seeing the, um, the green trading above the red. Or in other words, we are seeing the red exponential moving average trading below the green. Since the green is above, this at this point is nudging us towards the bulls being in charge in this market. And when the bulls are in charge in a particular market setup, the best trade opportunity one should be looking at are buy trade setups. So the H1 is our anchor chart. It helps us to understand the direction the market will likely move to. And as traders, we have been taught that the trend is our friend, that we should not go against the trend. So the H1 being the anchor chart helps us to know the trend in the market, helps us to identify who our friend is, which is the trend, which is the direction of the market. So getting to know where our friend wants to move to, uh, from here we say price is expected to move to the upside. That's the first thing we need to do. So getting to know this, we now take a move now to the 5-minute time frame. First we start with the anchor chart, get to see the direction of the market. So once we are clear with the direction of the market at that point in time, either price is expected to wave to the upside or price is expected to move to the downside, then we move to the charts where we are going to look for trade opportunities, which is the 5-minute time frame. So follow me now as I move to the 5-minute time frame. So I click M5 here. So I can use here, and then I can also decide to use this icon that looks like clock that has periods. Yeah, so this other icon also works. So I come to periods, then I can pick 5 minutes. So any of the two works perfectly. So once I'm on 5 minutes, as I am at this point in time, then I get to see what price is doing on the 5-minute time frame. Currently on the 5-minute time frame, I am seeing the red exponential moving average trading above the green. This is inverse to what I saw on H1. H1 showed me that the green is still above the red. So with what I am seeing at this point, I will have to exercise some patience. I will have to wait until the scenario I am seeing on H1 gets to be played out on 5 minutes. So that is very, very important. What I'm seeing on 5 minutes should also correspond with what I have seen on the anchor chart which happens to be the H1 time frame. Um, so let's even assume we were there as at the time the green here was above the red. What could we have done? Uh, so I will share with us what the strategy looks like, then I will scan through the market to look for other instruments that might give us a very perfect setup at this time so I can get to show us how to use it practically. Um, so currently, as we, as we can see here, the red is above the green, so that rules out, uh, taking a trade based on the H1 time frame on the M5 at this point in time on EURGBP. Uh, so the next instrument I have opened here, uh, but before I move on, let me quickly get to save this setup. Saving it would, uh, save me the stress of having to add these moving averages all over again every single time I want to check other instruments. That might become too cumbersome, especially if I'm someone who trades across different instrument asset class. But if I'm able to set it up and save it now, any other time I want to use it on other instruments, I just recall them straight up from my template. So how do I get to save, um, the moving averages or this setup that I have on my chart. I go to templates, so I click templates and I move to save template. For example, I want to save this template as scalping EMA scalping strategy. Yeah, so EMA scalping strategy. So I pick— I type out that name, emascalpingstrategy.tpl, as I have it. But because I have already previously saved it, Or let me use a new name so we get to know how to save our own. Uh, say I want to use Scalping Strategy EMA, so it will be different from the other name. Scalping Strategy EMA. EMA. So that's the only thing I will adjust. I won't touch the Save As Type so as not to move the file from where I intend to save it to another portion of the MT4. So I, I leave every other thing, only adjust the file name, then I tap on save. That's it. So any other time I need this particular, um, strategy, I just go to my templates and then I get to click on it and this come up on my chart immediately. So let's take a move now to USD/CHF. Okay, so this is the chart of USD/CHF also on our anchor chart. Our anchor chart, we should not forget, is the H1 timeframe. 1-hour timeframe is always our anchor chart, and I'm currently on my anchor chart. Now I go to my template since I have previously saved that template. I go there and I move to scalping strategy EMA. I believe we can still remember the name I used to save it back then. So scalping strategy MA, I click on it this way and automatically it comes up on my chart. So I don't need to go over all of the setup again since I have it saved as template. I recall it, I get to see it play out on my chart. So currently on USD/CHF on the hourly timeframe, I'm seeing the green exponential moving average trading above the red. Yeah, so this tells me price is still expected to continue to trade to the upside, at least according Um, to the 2 exponential moving averages. Uh, yeah, so I moved to the 5-minute for trade setups. Yeah, so this is the 5-minute time frame on, um, USD/CHF, and the last candle— yeah, so currently on the 5-minute time frame too, we are seeing the green exponential moving average trading above the red. This confirms what we saw on H1 timeframe. So this is very good for us. Yeah, very good in the sense that what we are seeing on 5 minutes corresponds with what we saw on the 1-hour timeframe. So the next thing is for us to identify our trigger bar. So we are just getting to our chart now, and we are seeing the current candle on the 5-minute timeframe trading around the 8 exponential moving average. The 8 exponential moving average is the moving average that will help us to get our trigger bar. Or what do I mean by the trigger bar? The trigger bar will be the bar that comes back to retest the 8 exponential moving average, which happens to be the green color. So if, for example, we were there as at the time this particular red candle came down to get rejected from this 8 exponential moving average, this could have been our trigger bar. And currently we are on the chart now, and the current candle on this 5-minute time frame is Sitting on the eight exponential moving average, we just need to exercise some patience. In the next one or two minutes, this particular candle is going to close and is going to act as our trigger bar. Yeah, so it has closed. We've gotten our trigger bar. That's the candle that is able to get rejected, even though it's slightly from the eight exponential moving average. So with this in mind, we the next step is for us to count. 5 candlesticks before this trigger bar. This is our trigger bar. So 5 candlesticks before this trigger bar happens to be 1, 2, 3, 4, 5. This is the 5th candle from the trigger bar. Now there's also one thing I also need to explain to us at this point in time, and that's that at this time none of these candlesticks should be found below these 2 moving averages. So if this current bearish candle, or what seems bearish, is able to trade lower than this 21 exponential moving average, then the whole setup has been nullified. I have to wait for another trigger bar if that happens. But since that is yet to happen, I still continue with the explanation on how we will be using this strategy. So this is our trigger bar. We have one, two, three, four, five. So out of these five candles, which of these five has a high higher than the rest? And that happened to be this particular candle here. This candlesticks here gave us a high that is higher than the other five candles we were to consider at that point in time. Yeah. So this this is a high. Of this particular candle, and the price is found somewhere here. So I take note of that price. So I'm going to take note of the price of the high, uh, high of those 5 candles under consideration, which happen to be 0.94456. 0.94456 happens to be the high of all of the 5 candles before the trigger bar. So with this obtained, the next step is for me to add 3 pips to the high. So I'm going to add 3 pips to the high, and 3 pips is the same thing as 30 points. I'm using 30 points in this instance because the broker I trade with happens to be a 5-digit broker. Yeah, so I'm trading with a 5-digit broker So that's why I'm using 30 points. So 3 pips is the same thing as 30 points. So with the end, with this being the price at the high, 94456, I will now add this 30, which happens to be 3 pips, to the high of those 5 candles. So I'm adding 30 to be able to obtain the price I would use. I'm using buy stop, so I would be able to get the price at which I will get to enter a trade on this particular instrument. And since I might not be there watching as at the time price is going to trade to that level, I will also utilize a form of pending order, a type of pending order called the buy stop, since I'm still expecting price to continue to trade to the upside and price is currently found below that particular price level. So I'm using a buy stop. So I add 30 to this price, that's 6 Five plus three gives me eight, and four, and four, and nine. So I have zero point nine four four eight six. This is going to be my buy price, and I might possibly use a buy stop to get to trade this particular. instruments around that price level. So I'm expected to take a buy once this instrument trades as high as 0.94486. That's where I'm going to take a buy from. Uh, so getting to where should I have my stop loss— no, my buy stop is going to be above the highs, then my stop loss is also going to be, uh, below the trigger bar. So this is my trigger bar. I get the low of the trigger bar. Uh, the low of the trigger bar, um, let me use this to get the low of the trigger bar. This is my data window. So the low of my trigger bar, I'm using the crosshair to get the price. The low of my trigger bar happened to be at 0.94435. 0.94435 happens to be the low of the trigger bar. 0.94435 is the low of the trigger bar. So this time I will deduct 3 pips from this low to get my stop loss. So minus 30, that will give me my stop loss. So my stop loss is going to be 5, and 3 minus 3 is 0. So every other thing remains constant. So 944, then 0 point So this is my stop loss on this setup. So after obtaining my buy stop price and my stop loss, the next thing is my TP. My TP on this setup should be minimum, minimum of 1.5 times the stop loss, minimum of 1.5 times the SL on this trade setup. So what is the size of my stop loss? I'm entering the trade at 94486. For example, 94486 is the price, uh, of entry, and this is my stop loss, 94405. So I copy that also. So what's the difference between these 2 price levels? Uh, 6 minus 5 is going to give me 1. 8 minus 0 is still 8. Yeah, so this is 81 points, which is also equal to— yeah, this is also equal to Eight pips. So eight pips stop loss. So my tip is going to be 1.5 times eight, and 1.5 multiplied by eight should be giving me a value in the region of how much is that? Eight times five is forty. That's zero. Keep four, and eight times one is eight plus four. That gives me one twenty. That's one hundred and twenty points. As my stop loss. That's about 12 pips. So 12 pips of TP with 8 pips of stop loss according to the setup on this particular instrument at this time. So with— so after obtaining all of these values, I, I know my TP, I know my stop loss, I know my entries. I can then go ahead to initiate the trade on the instrument. So let's take a look at the chart. Yeah, so price is not able to trade below the exponential moving average, so our, our trade setup is still very much valid. So I go to new order and I change this to a pending order, and it's a buy stop. So I pick a buy stop, and my entry price happened to be here, 0.94486. So I copy that, I drop that in here I get my stop loss. My stop loss is here. I also copy that and also do the same on stop loss. I drop that too. And my TP is here. Okay, I've not calculated my TP yet. Let me quickly calculate my TP. So my TP is from this price plus 120. So this plus 120. Um, so quickly, I also get to show us now what it looks like, um, to use this same strategy in case the trend in the market is downward. That means a bearish trend in the market. First port of call is to add our moving averages, that's the scalping EMAs. Um, so currently on NZD/USD, we are seeing the red exponential moving average trading above the green. The red is trading above the green, calling onto us loudly, start looking for sell opportunities on this instrument, sell opportunities on this instrument. So we go to M5 and we check what is currently happening on M5. So on M5 on this instrument we are seeing the green waving above the red. This is contrary to what we saw on H1, so we have to refrain from taking a trade at this point in time. So now I might need to still check some other instruments and see if there's anyone that, um, gets to give us an opportunity at this time that corresponds with the sell. Then I show us how to use it. If not, I'll just look at what has happened in the past And explain to us what would have— what we would have done as at that time if we were on our chart as at the time we had the red exponential moving average, which happens to be the slow moving average, trading above the red, telling us to start looking for opportunities to sell in the markets. Okay, okay, this M5 H1, so not at all, not at all, not at all. This is also a buy. Mm, I think H1 is also buy. GU H1 sell. Okay, so let's check M5. M5 too, price is already trading above the moving average. It's part of the rules I told us earlier that when the red is above the green, price should not trade above the moving average because currently, based on the location of price, These 2 moving averages are acting as support to price, and you are not expected to sell at support. You sell at resistance only. That is very important. You also need to keep that in mind. Do not take a sell trade at support, only sell around resistance. And that's why we'll be looking for sell trades below the moving average. Yes, that's a resistance level. According to this particular strategy. Now, so since I'm unable to really get an instrument that is currently looking bearish, so what I'm going to do is just to explain to us what we would have done. Let's say, for example, we were on our chart at this time when price was weaving to the downside and we had the 21 exponential moving average trading above The eight exponential moving average or the red trading above the green, telling us to take a sell. And if as at that time, let me even go to H1 first. Yeah, so I mark out the zone where I've had the red trading above the green like this. Yes, so that's the portion on the H1 time frame where the red has been trading above the green recently. So I take a move now to M5. And we would see that this range that I want to consider for our analysis happens to be a period when the red exponential moving average was trading above the green on H1. So let's just use this particular time for our— for this example. So at this point, we could see price trading above the moving average, so we would not have done anything as at this time. We would have to wait until this particular candle traded to the downside And we add this as our trigger bar. Can we see this red candle? This particular red candle, this particular red candle went back to touch the green exponential moving average. The green exponential moving average is our trigger point, and the bar that goes to touch it is the trigger bar for that particular setup. So we got this as our trigger bar. We count five candles backward. That's one, two, three, four, five. 5. And in the case of a sell, we get the price of the low. What is the low of all of these 5 previous candles? For that, the low is going to be on this particular candle because this particular candle had the lowest of all the lows of the candle preceding this, our trigger bar. So we get the low of this particular candle, which happens to be around this level. We don't necessarily have to pick place a pending order. Yeah, we can actually get to watch, like here, this was the low of that particular candle. Immediately this particular candle was able to trade below it up to 3 pips, we would have entered our sell, which would have been around this particular candle. And we could see now the rest, they say, is history, that price turned to the downside according to that strategy. But the strategy does not say you have to wait on the chart till it is exhausted this way. Just target minimum 1.5 times to 2 times what your stop loss is going to look like. And our stop loss is just 3 pips above this trigger bar. So 3 pips above here, we get our stop loss on this trade. And from what price did, you could see that price did not make a move towards our stop loss, which is a very good setup as at this time on the chart. So if you have any question on this strategy, you can still drop it in the chat comment, and I will definitely get to attend to those questions and make some clarification if there is any. And this is a strategy I want us all to get to test out on our demo. Let's see what it looks like, and when the results are also coming in, you can also get to drop. You can also get to drop the comments below this video. So thank you very much for. Um, staying tuned till the end of this video. So thank you for watching, um, this first in the series of the scalping strategy. So I look forward to having you around, um, some other time, especially when some new videos are released on this channel. So thank you, stay blessed, and don't forget to subscribe and like this video.