Scalping is a popular trading technique in forex trading. It involves the trading of currencies in real time which means that positions are held for very short periods of time.
Here, I will present a 1-minute scalping trading technique that you can use for your Forex trading. You may use any currency pair that involves majors for this strategy.
The indicators that will be used in this trading strategy are Bollinger bands (18 period) and the RSI indicator. We will also use the MACD indicator and the 3EMA indicator.
You should be using a 1-minute chart with this strategy. You may enter the trade in either of 2 ways – with a long entry or with a short entry.
With the long entry, you must wait for the 3EMA to cross above the 18 Bollinger bands middle line. In addition, the RSI needs to be above 50 and the MACD histogram needs to be above 0.
Conversely, to make a short entry, you need to wait for the 3EMA to cross below the 18 Bollinger bands middle line. Similar to the long entry, you must wait until the RSI is below 50 and the MACD histogram is below 0.
Where to Place Your Stop Loss
You should place your stop loss about 4 pips on either side of the Bollinger bands middle line.
This is a simple but very effective trading technique. Note that scalping usually requires a sizeable investment in order to be worthwhile. Therefore, you must be able to commit to this in order to get the best results with scalping.
When to exit the trade
You should exit the trade when 1 or more of the 3 conditions for entry are not satisfied.
So, you should exit a long trade when the RSI drops below 50, the MACD histogram is below 0 or the 3EMA crosses below the 18 Bollinger bands middle line.
You should exit a short trade when the RSI is above 50, the MACD histogram is above 0 or the 3EMA crosses above the 18 Bollinger bands middle line.
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