1-MINUTE SCALPING

STRATEGY
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What is the 1-Minute Scalping Strategy?

Is the 1 Minute Time Frame Good for Scalping?

Best Indicators for the 1-Minute Scalping Strategy

How to Trade the 1 Minute Scalping Strategy

Is the 1-Minute Scalping Trading Strategy Profitable?

What is the 1-Minute Scalping
Strategy?
As the name suggests, the 1-Minute Scalping Strategy is a specialized trading approach
focused on the 1-minute time frame, aiming to make quick, small profits by capitalizing
on rapid price movements within this short window.

Generally, as a trading strategy, scalping has its challenges and risks. It requires intense
focus and discipline, as the strategy involves entering and exiting positions quickly. A
successful scalper can make multiple trades in a day to achieve a predetermined profit
target. Quite often, they make hundreds of trades in a single day. This can be mentally
taxing and demands a trader to stay calm under pressure. Additionally, the strategy can
lead to higher trading costs due to the frequent number of trades made, and market
noise can significantly impact profitability.

Since scalpers typically look for extremely minor price movements, they analyze the
markets on short timeframes. The lowest timeframe known in trading is the 1 minute, in
which opinions vary regarding its efficiency. Some might say it’s not a long timeframe
enough to rely on it, while others argue it is certainly possible to use it to make quick
profits. Regardless, the idea of 1-minute scalping is to find specific chart patterns and
other trading signals to capture those extremely short-term price movements.

Is the 1 Minute Time Frame Good for Scalping?

The 1-minute time frame is suitable for scalping, but it’s essential to understand its
nature and requirements for successful implementation. Scalping on this time frame is a
short-term, fast-paced trading style focusing on small price movements. Traders who
excel in this method are typically adept at making quick decisions and can handle the
high-stress environment it creates.

One of the key advantages of the 1-minute scalping strategy is the potential for quick
profits due to the many trades that can be made in a day. This high-frequency trading
environment offers continuous opportunities for traders who are comfortable with rapid
decision-making and can efficiently analyze price movements on short timeframes.

Given these aspects, the 1-minute scalping strategy is best suited for traders who can
dedicate the time and focus required for this demanding trading style. It’s
recommended that traders also understand the principles of day trading or swing
trading before moving on to scalping. This approach ensures a better understanding of
the market and helps develop the necessary skills to manage the rapid decision-making
process inherent in 1-minute scalping. Additionally, many scalpers use sophisticated
tools such as level 2 market data and VPS services to increase their chances of success.
Take note that the 1-minute scalping strategy is particularly effective in high-volume
markets, such as the forex market. It is almost impossible to utilize this strategy in
markets with low liquidity. In forex trading, the market conditions are different since
there’s always liquidity, especially when trading major currency pairs. As such, scale
forex traders often apply this forex scalping strategy on a currency pair with high trading
volume. Also, since the trading costs of forex scalping strategies are quite high, it is
crucial to choose a forex scalping broker that provides convenient trading conditions
and low trading costs for this type of trading.

Best Indicators for the 1-Minute Scalping

Strategy
When it comes to 1-minute scalping strategies, several key indicators are crucial for
making informed and quick trading decisions. These momentum technical indicators
are tailored to capture the rapid price movements characteristic of this short timeframe,
aiming to secure small, consistent profits. Let’s delve into the most effective indicators
for the 1-minute scalping strategy

1. Simple Moving Average (SMA) and Exponential Moving

Average (EMA)
These are fundamental indicators for trend identification in scalping. The SMA calculates
the average price over a specific period, assigning equal weight to all prices. In contrast,
Exponential Moving Averages give more weight to recent prices, making them more
responsive to new market information. A common approach combines the 50-day EMA
and the 100-day EMA to discern trend directions. Another popular technique includes the
8, 13, and 21 EMA strategy.

Learn More

2. Stochastic Oscillator
This momentum indicator is crucial for identifying overbought or oversold conditions in
the market. It operates within a range of 0 to 100, with readings above 80 indicating
overbought conditions and readings below 20 suggesting oversold conditions. This tool
is beneficial for predicting potential price reversals in a 1-minute timeframe.

Learn More
3. Relative Strength Index (RSI)
The RSI is a popular momentum indicator used to measure the speed and change of
price movements. It helps traders to identify the market’s momentum and capitalize on
small price shifts within the 1-minute timeframe. It’s integral to the scalping strategy,
providing insights into potential upcoming movements.

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4. Bollinger Bands
These assess market volatility and identify overbought or oversold conditions. In a 1-
minute scalping strategy, traders often look for price breaches of the Bollinger Bands as
potential entry points, depending on whether the market is in an uptrend or downtrend.

Learn More

5. MACD (Moving Average Convergence Divergence)

This indicator is useful for revealing changes in the strength, direction, momentum, and
duration of a trend in a stock’s price. It’s calculated by subtracting the 26-day EMA from
the 12-day EMA, with the 9-day EMA serving as the signal line to highlight buy and sell
signals.

Learn More

Each of these indicators plays a specific role in informing trading decisions, and their
effectiveness depends on the ability to interpret them correctly in the context of market
conditions. For more information, we suggest you visit our comprehensive guide about
the best scalping indicators to use in trading.

How to Trade the 1-Minute Scalping Strategy?

Now that we have knocked the basics out of the way, let’s see how to trade the 1 Minute
Scalping Strategy using two trading techniques – the Triple EMAs Strategy and the 1-
Minute EMA and Stochastic Strategy.

The 1-Minute Triple EMAs Scalping Strategy

With this strategy, traders combine three different EMAs – the 50, 100, and 150 EMA.
So, before we dive into how to Use the strategy, we have to set the following indicators
on our TradingView chart:
 50 EMA – Blue
100 EMA – Yellow
150 EMA – Red

The 50 EMA shows us the shorter-term trend and sentiment, while the 100 and 150 EMA
shows us the longer-term trend; combining these three allows us only to enter a trade
when the trend is in our favor. Remember, the trend is your friend.

Here’s what your chart should look like after installing the indicators:

Trading Rules

The trading rules for this strategy are quite simple – you are looking for a crossover of
the price action below or above the EMA lines. At first, you need to identify the trend. To
do this, we must pay attention to the following:

For an uptrend, the price must be clearly above the 50, 100, and 150 EMA.
For a downtrend, the price must be clearly below the 50, 100, and 150 EMA.
The three EMA must be spread widely apart, having a slope of 30° and above for an
uptrend or – 30° and below for a downtrend.

Here’s an example of a market in a downtrend:

As you can see, traders can primarily use the EMA lines to identify the trend. However,
they can also use the crossover to enter and exit trades.

Entry and Exit Rules

Figuring out the trend is the most important step in using this strategy. Once we’ve done
that, we can look for our trading entry. For the sake of this example, we will use a
downtrend as an illustration.

Here’s how to determine an entry:

Whenever the price retraces/pulls back to either the 50 or the 100 EMA and then
rebounds to continue the trend, we place a SELL order immediately after the first candle
closes before the 50 EMA. Here’s how it looks on the chart:
There are many ways to manage your trade, but the simplest and most effective
method is setting a fixed target profit at a 1.5 risk-reward ratio.

So, how do you place your stop loss? Here’s how: place the stop loss above the swing
high (in a downtrend) or below the swing low (in an uptrend). Here’s an example:

Alternatively, if you have more time to monitor price action, you can also trail your stop
loss as the price continues moving in your direction. This way, you can ride the trend for
long.

1-Minute EMA and Stochastic Oscillator Scalping Strategy

We all know that long trends don’t happen daily, but this shouldn’t stop you from trading
as a scalper. Many traders favor a sideways market condition so they can utilize the
range trading strategy. In this market mode, you can jump in and out of many trades in
a single day without attempting to ride a long trend, and this second 1-minute scalping
strategy teaches you just how to do that.

So, here is a list of indicators to add to our trading chart to make this work:

50 and 200 EMA

Stochastic Oscillator (Default settings)

If you install them correctly, your chart should look something like this:
Trading Rules

Now to the meat and potatoes of the strategy: the entry rules. For the sake of this
illustration, we will use a BUY scenario. However, you can take a sell trade using a similar
approach.

Here are the things you want to see before you open a buy trade:

Price is above the 50 and 200 EMA

Enter a buy trade immediately when the Stochastic Oscillator crosses above the 20
levels.

Here’s how it looks on the chart:

From the above chart, you can see that we have a lot of entry opportunities within a
short period. So, you want to get in and out of your trades quickly.

Risk Management

Scalping can quickly go wrong if you don’t have solid risk management rules. One of the
most important things is to set rules that guide where you place your stop loss and
target profit orders. There are many ways you can go about this; however, one common
way is to do the following:

Set the stop loss around 1 or 2 Pips below the closest swing low in a buy trade. For a
sell trade, place it above the closest swing high.
Setting your target profit can be done in two ways: either set a static target point, say
1.5 risk-reward ratio, or you manually close the trade when the Stochastic Oscillator
hits overbought (in a BUY trade) or oversold (in a SELL trade) levels.

Is the 1-Minute Scalping Trading Strategy

Profitable?
The 1-minute scalping strategy can certainly be profitable, but it’s crucial to understand
its nuances and the level of commitment it requires. For instance, the profitability of this
strategy hinges on disciplined execution and a solid grasp of technical indicators. Even
more important, the success of the 1-minute scalping strategy heavily relies on a
trader’s instincts and the skill to identify extremely short price movements.

As such, 1-minute scalping is only suitable for some traders. It’s best suited for those who
can make rapid decisions, handle stress effectively, and have a keen eye for short-term
market movements. Beginners or those accustomed to longer-term trading styles might
find it challenging to trade in the 1-minute timeframe.

But you must try it first to know if this is the right strategy for you. If you know yourself well
enough and you feel more comfortable in a fast-paced environment, then you should
definitely try it out. Remember that the 1-minute scalping strategy enables you to be
neutral about the market and to be out of a position most of the time. Therefore, many
feel much more comfortable using this trading style.

Yet, the strategy is not without challenges. It requires managing a large number of
trades within a day, as scalpers aim to accumulate many small profits. This high-
frequency trading leads to higher trading costs compared to longer-term trading
strategies and the risk of quick, small losses accumulating rapidly. Market noise and
volatility can also significantly impact trade outcomes.

So, overall, while 1-minute scalping can be a profitable trading strategy, it demands a
specific trader personality, intense focus, and a disciplined approach to risk
management. If it suits you, go for it.