A Guide to Creating a Minimalistic Scalping Strategy | Forex Factory

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A Guide to Creating a Minimalistic Scalping Strategy

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  • #1
  • First Post: Edited 4:55am Apr 21, 2017 3:41am | Edited 4:55am
Hello Traders,

This my first thread in Forex Factory. I present my minimalistic strategy which brings me about 20 pips daily on average for the last three months. Forex scalping doesnt need to be complicated at all. This simple strategy with basic indicators that can be applied to low spread currency pairs. Use on the 1 min charts as indicators periods are tuned for this exact time frame.

Time frame:

  1. 1 min. charts


Trading sessions:

  1. London session, US session


Currency pairs:

  1. Low spread (EUR/USD, USD/JPY)


Indicators:

  1. 12-period Exponential Moving Average (EMA 12) applied to the Close
  2. 26-period Exponential Moving Average (EMA 26) applied to the Close
  3. 55-period Moving Average (MA 55) applied to the Close


Entry Rules for Long Trades:

  1. 12 EMA crosses up the 26 EMA and 55 MA from below
  2. Open buy position
  3. Place protective stop-loss below the most recent swing low


Entry Rules for Short Trades:

  1. 12 EMA crosses down the 26 EMA and 55 MA from above
  2. Open sell position
  3. Place protective stop-loss above the most recent swing high


Exit Rules for Short and Long Trades:

  1. Watch Price Action. Exit trade when 7 to 15 pips profit.


You can look at any other indicator on top of that if it suits you. I often use DAILY PIVOT and check 15M time frame with WEEKLY PIVOT for wider information.


Indicators:

Attached Image (click to enlarge)
Click to Enlarge Name: 1.png Size: 768 KB



Entry points:
Attached Image (click to enlarge)
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Stop Loss and Take Profit:
Attached Image (click to enlarge)
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All the Best!
  • #2
  • Apr 21, 2017 4:15am Apr 21, 2017 4:15am
Just now EUR/USD:

Short Entry: 1.07256
Stop Loss: 1.07356
Take Profit: 1.07013

+24,5 pip
Attached Image (click to enlarge)
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I am done for today
  • #3
  • Apr 21, 2017 5:40am Apr 21, 2017 5:40am
Thanks.............
Attached Image (click to enlarge)
Click to Enlarge Name: mah1.png Size: 45 KB

Attached Image (click to enlarge)
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Attached File(s)
File Type: ex4 MA-12-26-55 Ribbon.ex4   10 KB | 1,262 downloads

Attached File(s)
File Type: ex4 Daily Pivot.ex4   54 KB | 870 downloads
  • #4
  • Apr 21, 2017 6:11am Apr 21, 2017 6:11am
i still don't understand How the daily and weekly pivot is being used.
  • #5
  • Apr 21, 2017 6:21am Apr 21, 2017 6:21am
Quoting dkarev
i still don't understand How the daily and weekly pivot is being used.
Hi dkarev,

Please refer to first post:

Quote
You can look at any other indicator on top of that if it suits you. I often use DAILY PIVOT and check 15M time frame with WEEKLY PIVOT for wider information.

Which means you may use confirmation for this setup. I am looking constantly at Pivots and S/R levels. I check higher time frames as well. This is TREND FOLLOWING METHOD. And in this kind of methodology you watch for reversal or consolidations zones. Pivots and or S/R levels are this kind of zones - and I just watch them closely.

This is basic knowledge. Basic technical knowledge of charts and Price Action. Be sure you know some of this before using any trading system.
  • #6
  • Apr 21, 2017 6:21am Apr 21, 2017 6:21am
You will get Chopped up as soon as price goes sideways or gets whippy.
The only system that will work is one designed by and for yourself.
  • #7
  • Apr 21, 2017 6:32am Apr 21, 2017 6:32am
Quoting bloodpoodle
You will get Chopped up as soon as price goes sideways or gets whippy.
Hi bloodpoodle,

Thats why you have three indicators. EMA, EMA and SMA. One of the EMA have to cut through two other moving averages, this alone filters some of the wrong entry points. Another filter is checking higher time frames, you skip bad entry when ie. price is going strongly against trend on higher time frame. But of course there are other bad entry points especially during times price going flat and sideways and you just cannot filter them all - this is when you use money management. This filters rest of problems.

Have no doubts you will loose as well you will win investing Forex and other instruments. You will have ups and downs, it is proven. Have an edge. This edge is solid, simple and predictable, even though it is not perfect. There is no perfect setup.
  • #8
  • Apr 21, 2017 6:34am Apr 21, 2017 6:34am
Quoting Plainview
Just now EUR/USD: Short Entry: 1.07256 Stop Loss: 1.07356 Take Profit: 1.07013 +24,5 pip {image} I am done for today
Any additional exit rules, reverse signal...?
  • #9
  • Edited 6:52am Apr 21, 2017 6:40am | Edited 6:52am
Quoting Plainview
{quote} Hi dkarev, Please refer to first post: {quote} Which means you may use confirmation for this setup. I am looking constantly at Pivots and S/R levels. I check higher time frames as well. This is TREND FOLLOWING METHOD. And in this kind of methodology you watch for reversal or consolidations zones. Pivots and or S/R levels are this kind of zones - and I just watch them closely. This is basic knowledge. Basic technical knowledge of charts and Price Action. Be sure you know some of this before using any trading system.
thanks again......
Attached Image (click to enlarge)
Click to Enlarge Name: mam15.png Size: 61 KB

Attached Image (click to enlarge)
Click to Enlarge Name: mam12.png Size: 48 KB

Attached File(s)
File Type: rar a Minimalistic Scalping Strategy.rar   64 KB | 1,221 downloads

Attached File(s)
File Type: ex4 Daily Pivot.ex4   54 KB | 898 downloads

Attached File(s)
File Type: tpl a Minimalistic Scalping Strategy.tpl   6 KB | 982 downloads
  • #10
  • Edited 7:12am Apr 21, 2017 6:47am | Edited 7:12am
Hi Go5,

Quoting Go5
{quote} Any additional exit rules, reverse signal...?
No. You are on your own here. For exit use your Money Management (I use 1:3 Risk to Reward Ratio, so if SL is 10 pips than TP is 30 pip, those numbers are fixed). But if you want to really follow the trend and ride on your profits just glue yourself to the monitor and watch for Pivots, S/R and Price action.

Here is an example:

+4 pips
Attached Image (click to enlarge)
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I was hoping for going up. But considering this is DOWN TREND and considering three long wicks on candles I have decided to take 4 pips and leave. So it was 5 pip to 15 pip trade (SL to TP) and I could get 15 pips, but not this time. I took 4 pips (which is 2.9 pip netto, -0.7 commission and -0.4 spread) and I am waiting for next opportunity. Scalping remember?
  • #11
  • Apr 21, 2017 7:13am Apr 21, 2017 7:13am
pivot with history
Attached Image (click to enlarge)
Click to Enlarge Name: mam30.png Size: 75 KB

Attached File(s)
File Type: ex4 Daily Pivot with History.ex4   19 KB | 675 downloads
  • #12
  • Apr 21, 2017 7:15am Apr 21, 2017 7:15am
Quoting bloodpoodle
You will get Chopped up as soon as price goes sideways or gets whippy.
As Planview stated, using good MM will minimize losses, that goes for any trading strategy you use. Since this a trend based strategy, one can simply sit on the sidelines while in a sideways market... no trade is better than a losing trade IMO.
  • #13
  • Edited 7:46am Apr 21, 2017 7:32am | Edited 7:46am
one point to look in choppy market ..... the rainbow is narrow .....
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  • #14
  • Apr 21, 2017 7:47am Apr 21, 2017 7:47am
Quoting Xw53Jk
one point to look in choppy market ..... the rainbow is narrow ..... {image}
Thanks Xw53Jk,

Stay with the trend or trend is your friend they say. Right? This is the trend following system - if there is no trend - well, it will not give you lots of good entry points. If lines get closer together or if volume drops significantly this is another filter - stay out.

Also an extra tip:
You may want to know that from Frankfurt open 06:00 GMT and from London open 07:00 GMT you will have great time till about 11:00 GMT when people just go to Lunch. Then from NY open 12:00 GMT you will have great time till 16:00 GMT when, again, all New Yorkers go for Lunch.

Stay safe, watch PA, know your Pivots and this is all in the world you need to have! This Edge will profit you on monthly basis.

Best!
  • #15
  • Apr 21, 2017 7:54am Apr 21, 2017 7:54am
Quoting Plainview
{quote} Thanks Xw53Jk, Stay with the trend or trend is your friend they say. Right? This is the trend following system - if there is no trend - well, it will not give you lots of good entry points. If lines get close together or if volume drops significantly this is another filter - stay out. Also an extra tip: You may want to know that from Frankfurt open 06:00 GMT and from London open 07:00 GMT you will have great time till about 11:00 GMT when people just go to Lunch. Then from NY open 12:00 GMT you will have great time till 16:00 GMT...
thank you for your thread, Sir .......... Please further guidance
  • #16
  • Apr 21, 2017 8:02am Apr 21, 2017 8:02am
Thanks PV. Always pleased to see those willing to take the time to share.

One tiny request: Just for those of us that have a problem with colors, would you possibly make that 12 a contrast color?

Thanks,
Darryl
  • #17
  • Apr 21, 2017 8:21am Apr 21, 2017 8:21am
Quoting Plainview
Hi Go5, {quote} No. You are on your own here. For exit use your Money Management (I use 1:3 Risk to Reward Ratio, so if SL is 10 pips than TP is 30 pip, those numbers are fixed). But if you want to really follow the trend and ride on your profits just glue yourself to the monitor and watch for Pivots, S/R and Price action. Here is an example: +4 pips {image} I was hoping for going up. But considering this is DOWN TREND and considering three long wicks on candles I have decided to take 4 pips and leave. So it was 5 pip to 15 pip trade (SL to TP)...
++++++++++++++++++++++++

Post 10 is an excellent example of how M1 can make you aware of when money is coming into market. A few M1 pin bars may not look like much, however, when 2, or more, show up at the same place, it could mean buyers/sellers are en masse at that point, and give you fair warning of impending direction change.
  • #18
  • Apr 21, 2017 9:18am Apr 21, 2017 9:18am
I hope ...my chart is right
Attached Image (click to enlarge)
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  • #19
  • Edited 11:27am Apr 21, 2017 11:08am | Edited 11:27am
Quoting Xw53Jk
I hope ...my chart is right {image}
Hard to tell Xw53Jk. You stick to three lines. In my setup, for better recognition, fastest have lighter color:

  1. 12 EMA is gold
  2. 26 EMA is blue
  3. 55 SMA is black

So the faster is moving average the brighter it is. Brighter averages will cross darker averages - this is just clear approach. Drop the rest of it, keep Pivots. Use whatever colors you want but keep it simple. This is the whole point - to have a simple yet robust system.

  • #20
  • Apr 21, 2017 11:57am Apr 21, 2017 11:57am
Good strategy, if you can trade this in a timeframe even lower than 1 minute, even better!..thanks for your contribution.
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