Trading Strategy

1 Minute Scalping Strategy: Master and Quickly Boost Your Trading Gains

May 1, 2022 | 3:37 pm | The 5%ers' Blog > Trading Strategy
May 1, 2022 | 3:37 pm
The 5%ers' Blog > Trading Strategy
How to Master The 1 Minute Scalping Trading Method

Traders constantly seek to improve their strategies, trying various methods to close successful trades. One popular approach is scalping—a technique where trades are entered and exited almost instantly. Scalping capitalizes on small, rapid price movements within minutes. Now, you might be wondering, what exactly is the one-minute scalping strategy? This fast-paced method targets small price movements within a single minute. Traders use one-minute charts to execute numerous quick trades throughout the day. This strategy allows for rapid profits and demands sharp observation and swift decision-making.

This guide is for educational purposes only and not a recommendation. We’ll discuss the one-minute scalping trading method and explain the strategy in detail.

So, buckle up. This is going to be a fun and educational ride!

Introduction to Forex Scalping

Forex Scalping often comprises profiting on small price changes on timeframes ranging from 1 to 15 minutes. Many traders may opt to liquidate their positions in roughly 60 seconds rather than wait for a quarter-hour or more. Beginners often drive towards scalping because of its fast-paced nature. However, as with any other trading style, you need to have a sound plan before applying the 1-minute scalping trading method.

What is 1 Minute Scalping in Forex?

Imagine you are on a racetrack, aiming for the top spot. This is how we can accurately describe the 1-minute scalping trading. Focusing on small price movements in short time periods of one minute makes this strategy one of the most used by Forex Trading experts. Traders keep an eye on the one-minute charts and, in this way, can make quick trades throughout the day. The goal is simple: make profits depending on the size of the investment, and that is fast since they keep an eye on the charts in order to enter and exit positions quickly.

The 1-minute scalping method in forex involves starting a trade, gaining a few pips, and then closing the position. Because you only make a few pips on every trade, select a broker or a prop firm with the shortest spreads and lowest costs is critical.

 
 
 
 
 
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If you want to learn more in-depth, we have prepared a special workshop on forex scalping.

The Precision and Discipline Required

Scalpers thrive on the smallest price fluctuations, often making dozens or even hundreds of trades in a single session. This requires sharp focus and lightning-fast decision-making powered by real-time market data. Essential tools like moving averages, RSI, and Bollinger Bands help spot the best entry and exit points. But make no mistake: this strategy is not for the faint of heart. It demands discipline and precision. You need a solid risk management plan because the fast pace can lead to significant losses if not handled properly. Using stop-loss orders is crucial to keeping potential losses under control. You also need to be prepared to react quickly to any changes in the market.

The 1 minute scalping strategy is perfect for those who thrive in a fast-paced environment. It offers the potential for quick profits, but it requires keen observation, quick decision-making, and disciplined risk management. If you can stand the heat, this strategy may be just what you need.

This one-minute scalping approach is relatively simple to master and can be extremely rewarding when utilized correctly.

Why Choose 1 Minute Scalping?

1-minute scalping suits traders who enjoy fast-paced action. It demands attention to detail and quick decisions. The benefits include:

  • Quick Profits: You can make profits within seconds or minutes.
  • High Trading Frequency: More trades mean more opportunities to profit.
  • Reduced Exposure: Short trading periods reduce the risk of significant market fluctuations.

Essential Tools and Indicators for the 1-Minute Scalping Method

Indicators are crucial in technical analysis, especially in the action-packed scalping method. The one-minute scalping method in forex involves starting a trade, gaining a few pips, and then closing the position. Because you only make a few pips per trade, selecting a broker or a prop firm with the shortest spreads and lowest costs is critical. Success in one-minute scalping requires the right tools and indicators.

Moving Averages: 

These help identify trends and potential entry/exit points. The 200-period and 50-period moving averages are commonly used. A crossover of these averages can signal a potential trade.

Relative Strength Index (RSI): 

This measures the strength of price movements and helps identify overbought or oversold conditions. An RSI above 70 indicates overbought conditions, while an RSI below 30 suggests oversold conditions.

Bollinger Bands: 

Consisting of a moving average and two standard deviation lines, they help identify volatility and potential reversal points. When the price touches the upper band, it might be overbought; when it touches the lower band, it might be oversold.

Simple Moving Average (SMA): 

It displays the average price of a trader’s deals over a specified period, helping to determine whether the cost of stocks, commodities, or forex is rising or falling and thereby identifying a trend.

Exponential Moving Average (EMA): 

Another valuable indicator is the Exponential Moving Average (EMA), which allows traders to weigh recent prices more heavily. Because it responds faster to recent price changes than historical price movements, the EMA is one of the best scalping indicators.

Traders use this technical indicator to generate buying and selling recommendations based on historical average crossings and divergences.

Moving Average Convergence/Divergence (MACD): 

MACD is another popular indicator used by traders. The MACD scalping indicator is calculated by subtracting the 26-day EMA (exponential moving average) from the 12-day EMA. The 9-day EMA serves as the MACD default setting or signal line to highlight buy and sell signals.

Stochastic Oscillator: 

Another popular indicator is the Stochastic Oscillator, generally known as a momentum indicator based on the principle that momentum precedes price. It signals potential natural movement before it occurs and indicates whether the price is overbought or oversold.

Traders employ this scalping indicator to anticipate natural movement before it occurs. The indicator also states whether an asset’s price is overbought or oversold. Using it in a one-minute timeframe indicates whether the price will halt the ongoing trend in the next few minutes. 

Now that you know what a 1-minute scalping strategy is and what some of the indicators you can use, let’s illustrate how you can enter long and short positions. 

So, let’s see how to implement the 1-minute forex scalping strategy.

1-Minute Scalping Trading Strategy

Now that you know what a 1-minute scalping strategy is and what some of the indicators you can use, let’s illustrate how you can enter long and short positions. 

The indicators we are using for this strategy are 50 and 100 EMAs and Stochastic. 

How Do You Enter a Long Position?

Let us now concentrate on entering a long position on the strategy. In a scalping strategy, a buy position must match the following criteria:

  • To establish a buy position, we must wait for the 50 EMA (Exponential Moving Average) to cross above the 100 EMA. 
  • Second, we must wait for the price to return to the EMAs. 
  • Finally, the Stochastic must be above 20.

If all three of these statements are satisfied, we can enter long. You can set the take-profit level 8-12 pips high from your entry point. You can place the stop-loss below the recent swing low.

1-minute scalping strategy bullish trade setup

1-minute scalping strategy bullish trade setup

How Do You Enter a Short Position?

The following events must occur to enter a short position:

  • The 50 EMA must be lower than the 100 EMA. 
  • Before going short, the Stochastic Oscillator must fall below 80.

The appropriate take-profit level is 8-12 pips from your entry point. You can place the stop-loss near the recent high.  

2-minute scalping strategy bearish trade setup

2-minute scalping strategy bearish trade setup

Developing Your Strategy

Creating a successful 1-minute scalping strategy involves several steps:

  • Choose the Right Currency Pairs: Not all currency pairs are suitable for 1-minute scalping. Look for pairs with high liquidity and tight spreads, such as EUR/USD or GBP/USD. High liquidity ensures quick trade execution, while tight spreads reduce trading costs.
  • Define Your Risk Management Plan: Risk management is crucial in 1-minute scalping. Determine the maximum amount you’re willing to risk per trade, typically a small percentage of your account balance. Use stop-loss orders to limit potential losses.
  • Set Clear Entry and Exit Rules: Clear entry and exit rules are essential for consistency. For example, you can enter a trade when the price crosses above the 200-period moving average and exit when the RSI reaches 70. Stick to your rules to avoid emotional trading.
  • Monitor Market Conditions: Market conditions can change rapidly, especially in a 1-minute timeframe. Stay informed about economic news and events that might impact the market. Avoid trading during periods of high volatility or low liquidity.

Execution and Practice

  • Use a Demo Account: Before risking real money, practice your 1-minute scalping strategy in a demo account. This allows you to refine your approach and build confidence without financial risk.
  • Start Small: When you transition to a live account, start with small trades. This helps you manage risk and gain experience in actual market conditions.
  • Keep a Trading Journal: Track your trades, including entry and exit points, reasons for taking the trade, and the outcome. Analyzing your journal can help identify patterns and areas for improvement.

Tips for Success

  • Stay Disciplined: Discipline is key to successful scalping. Stick to your trading plan and avoid impulsive decisions. Emotions can lead to mistakes and losses.
  • Stay Focused: Scalping requires intense focus and concentration. To stay sharp, avoid distractions, create a conducive trading environment, and take regular breaks.
  • Learn Continuously: The forex market is dynamic and ever-changing. Stay updated with market trends, new strategies, and economic developments. Continuous learning enhances your trading skills.

Common Mistakes to Avoid

  • Overtrading: Trading too frequently can lead to excessive losses and burnout. Stick to your plan and avoid chasing every opportunity.
  • Ignoring Risk Management: Neglecting risk management can quickly wipe out your account. Always use stop-loss orders and manage your position sizes.
  • Letting Emotions Dictate Trades: Emotional trading often leads to poor decisions. Stay calm and stick to your strategy, even during losing streaks.

Pros and Cons of the 1-Minute Scalping Method 

To evaluate forex 1-minute scalping, we will examine the benefits and drawbacks of scalping.

Pros

  • The outcomes of the 1-minute strategy are visible after just 1 minute. After such a short time, you may know if you won to progress or you lost to strategize for recovery from your loss.
  • A large number of trades: The 1-minute technique allows you to conduct many deals in a single day.
  • The primary reason for scalping is that tiny moves occur far more frequently than bigger ones.

Cons

  • Traders take advantage of amateur scalpers because they understand the market better.
  • A one-minute scalp needs quick reactions.

Closing Though in One Minute of 1 Minute Scalping Strategy

As we end our forex scalping strategy guide, we would like to give you a few crucial points to think about before logging into your following markets accounts and preparing your charts! The 1-minute scalping strategy is like the adrenaline rush of the Forex trading world. It’s perfect for those who love the thrill of quick, decisive actions. Picture it as a rapid dance with the market, where every minute counts, and a keen eye can lead to swift gains. This method isn’t just about making quick profits; it’s a test of precision, discipline, and staying sharp. With tools like moving averages and the RSI by your side, and a strong risk management plan, you can navigate the fast pace and harness the benefits. 

Just remember, while it’s exciting, it’s also demanding. So, if you enjoy the high-speed chase and are ready to learn continuously and refine your skills, the 1-minute scalping strategy might just be your perfect trading partner.

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