Scalping (1m and 5m tf)

Beginner Questions
1

Hello all I am new to the forum and seeking some guidance from regarding scalping on the 1m and 5m tf’s.

I am looking to get into scalping in forex and have been looking at various forums/strategy websites and have noticed that for scalping the markets many traders seem to be implementing intricate strategies involving ma crossovers, ma bounces, bollinger bands, macd, stochastic and many other indicators. While these may suit the specific traders using them, in my opinion some of these systems can be confusing or unprofitable.

On the other hand I am considering trading chart patterns on the 1m and 5m tf (e.g double tops, double bottoms, wedges, head and shoulders etc etc) but specifically wedges. However I dont seem to hear about traders purely trading off chart patterns in order to scalp the market. I just wondered if trading chart patterns on low tf’s can be profitable?

Please see paragraph below, found online while looking into scalping:

“An important key factor to these charts patterns is the timeframe they are seen and used on. As with any other setup in the forex market, chart patterns on smaller timeframes such as five minute charts are not respected as much as those on hourly, 4 hour, and or daily charts. Although smaller timeframe chart patterns are not respected as frequently they can still be used successfully”

My question is does this imply that trading chart patterns on 1m and 5m chart will be an unreliable strategy?

Any advice would be greatly appreciated

Thanks

RSK88

2

Patterns do exist in the smaller time frames, though in my opinion, the smaller the time frame, the less reliable the pattern. I dont believe an indicator based method will produce consistent results no matter the time frame. Though I rarely trade the smaller time frames anymore when I do, I use the same methods and principles as any other tf. The fact is, trends exist, in all timeframes (5m and up). And where there are trends, there is potential for consistent profit.

3

Smaller TF’s are choppy often. You do not see those patterns so often on 1M especially. And following the patterns under small TF’s are dangerous because price action is much faster and it is hard to predict where it goes next.

I would check on higher TF’s for the patterns and spot a good timing to scalp on 1M or 5M. If you mean to scalp this way, then it should work.

4

i agree with Pipdealer, 1 min TF is most of the time just too choppy, and i dont see there the chart patterns to hold up good enough to trade them; ie a often 1-3 pips can screw up the while thing, and that much random move is always in the market, but in case of 1 min chart it is the difference between a sound entry or a tight SL hit.

I scalp from 5 min chart, where i find a use for the 1 min chart to confirm my entries, or see some minor support or resistance lines that would be hidden if purely looking at 5 min chart.

Even scalping on 5 min chart, dont forget to pay attention to the bigger news releases, as well be vary to scalp very slow markets with 5-10 pips range, as a sudden still small 20 pips move would change the landscape too much. Scalp when there is enough liquidity, and go for 5 pips when you feel confident there is room for a 10 pips move, not the other way.

all in all if you have time to spend in front of the screen, and able to make quick decisions, scalping is great, and i find it very rewarding.

5

It’s not that they will be unreliable as such, it’s that you don’t often get good patterns, and so you tend to try and make them fit, so it’s generally impracticable to do so.

However there is one key thing/pattern that can improve your chances of success considerably, and that is trade when a wave is completed, if you look at a high and a low and there is a peak in the middle, it’s a good sign of a reversal -

So even though I don’t think that patterns on the whole are much use on smaller timeframes, using this single part of a pattern can make a big difference.

6

I think you’re onto something here. Try naked trading. It forces you to rely on your intuition, rather than some lagging indicator.

7

I very much agree with the above, indicators on the whole are a waste of time, I do use a strategy that uses the StochRSI, simply because it gives me the summary of what is happening on my chart, so I don’t need to do as much analysis and use use it for ‘confirmation’, other than that I use the 21ma and the basis of my strategy is trade with trend and use the deviation from the MA, and of course the ‘dog leg’ shape as in my earlier post. I use 5 mins chart and concentrate on that and not bother looking at longer timeframes either.

Keep it simple, Forex is not complex it is random.

9

I’ve begun my scalping again and fiddle with the 1M and 5M TFs daily. I trade the London/NewYork overlap for the liquidity and just look at pivots + price action and levels of S/R for my entries and exits.

I find myself targeting between 3 - 5 pips most of the time but a breakout that has validity even on a 15M TF or 1H TF is good for 15 - 20 pips a shot.

Scalping requires a lot of practice and screen time. Especially on lower TFs there’s a lot of choppiness and precision is necessary. With a scalp, you shouldn’t be risking 10 pips to close out a profit of 2, that’s where precision is key.

10

With scalping, you start 1-3 pips in the hole (on majors). Good luck with that.

11

true, thus the timing is key, as well to have a volatile enough price action to support your decision. myself almost never scalp the Asian market, as there is little volatility to support me.

12

LOL I have to disagree. If it were random, then we’d all be gambling.

13

Yep, timing is the key with all of it. Precise entries mean you’re in profit even 10 seconds after entry. For me, I look to be in profit by 2 minutes otherwise I look to exit.

Been trading this morning starting 6:00am EST, which is about 11:00am London. I trade the hour before london lunch, take a break for breakfast and come back at 8:00 for another 2 hours till 10:00am EST. For me it’s the best time to trade out of convenience and the overlap of London and NewYork sessions provide enough movement for me to scalp.

I look to target 10 - 20 pips a day. The power of compounding :smiley:

14

Scalping is all I do. I tried a lot of different systems, mentioned here in Bbips.
After every try I ended up on my scalping again, 1 minute mainly 5 minute second.
Over a year now I successfully scalp 95% of the time and try in between new systems from this forum but always returned to my scalping.
Screentime required. That’s why I try in between the longer time-frames but always fail on it.
I use Oanda for many years now, unfortunately they have now problems with there server since about 2 month, many times (not always) when news-times comes around there server crashes intermittend as soon as the volume gets really high and then of course your trade goes “blind” from your end, not very good for scalping.
You have to be able to click when YOU want to click.
After about 20 minutes, after the “news-dust” settled, the connection is on for all day without a problem.
Since I like to trade the “backside” of the initial spike as a counter-trend I can’t, because the Java console from Oanda is gone and only back intermittent.
I also know it is Oanda because as soon as it happened the first time around I made trades on the demo from IBFX at the time Oanda was gone without a problem. Therefore not my ISP.
I opened ~3 weeks ago a additional new live account with a MT4 broker and so far I can trade now the news-time again.
Unfortunately the spread is not as good as on Oanda. So I still test this part before I ditch Oanda.

As far as the system:
Oanda Black background 1minute and 5 minute charts open.
95 percent of the time I trade the EUR/USD only
sometimes the AUD/USD, same setup for both of them, but I believe it works on all charts, yet I also believe learn and watch and apply only 1 or 2 pairs and get them to know well instead of jumping all over the place (pairs).
At least that works for me, master 1 or 2, then being a (jack of all trades).

1 Standard Bollinger Band 20 (Period) 2 (deviations) color white
1 Bollinger Band 10 (period) 1 (deviations) color yellow
EMA 50 Pink. That’s a Moving Average 50 exponential.
That’s it.
Long Trade:
whenever the candle goes above the upper yellow 10 1
and is above the EMA 50
and on the 5 minute chart the candles are between mid BB and upper BB on the 20 2,
I trade in that direction.
Short Trade:
Same in reverse, meaning:
whenever the candle goes below the lower yellow 10 1
and is below the EMA 50
and on the 5 minute chart the candles are between mid BB and lower BB on the 20 2, I trade in that direction.
If the candles are hovering around the EMA 50, I wait till they move above/ below the EMA.
On the beginning (over a year ago) I had a EMA 8 on the chart too. It made it easier to see when the candles are just zig zagging over the EMA 50 since the EMA 8 stays very close to the candles.
Same I do in MT4 except I use blue for the BB’s, Yellow EMA50 on light background.
Pictures attached, in case anybody want’s to try.
Best times to do:
London Open 3 AM until ~9AM EST, sometimes quick between 10:15 till 11:45 AM EST time. There is a time problem after 9 AM for a while, trade is going sideways, if you want to trade then you have to expect 1~3 pips only, you have to be on the close clicker fast.
Second best from 7 PM EST till ~9 PM EST, after that… I watch a little TV and go to bed, only reason why till 9 PM, after all I get up at ~3 AM EST again.
As for now, it’s Christmas Time more patience needed.
Pips: from 10 up, respective watch and let it ride, latest jump out (close trade) whenever it reaches the opposite yellow (10 1) upper/lower BBand.
Stop Loss: 10 pips fixed (emergency SL always on), I close a bad start with ~5 pip loss, because it meant the trade did not start right-away in the direction you taught it goes. Keeps the losses minimized and 10 pip in case the platform goes out:eek:

As a suggested setup on the MT4 platform you can also use the attached zip file, in there is the
BBand stop with alert, it is the same as the 10 1 BB on Oanda in yellow, but has red and blue start arrows.
iSession GMT I use as background color can be modified to any other platform time as needed and Blur’s Price&Time.
Additionally needs the 20 1 BB and the EMA 50.
The system needs experience, you will only get trading every day on a live account, screen-time and patience needed too.
Live account (even it is only 10 cents) because of psychology.
Demo is good if you never traded or need to learn a new platform 1 month max, then it’s time to move on and loose money (you will) but the reward will come too, I know.:slight_smile:
If the post is to long, just skipped and read the next one.:slight_smile:
Merry Christmas to all and may the trading force be with you.:slight_smile:



Bpips.zip (3.96 KB)


15

It may not be completely random, but in order to succeed you must adopt the mindset that the market is unpredictable and anything can happen at any time. Also, it is possible to gain an edge when betting on a random outcome. Professional gamblers do exist, and to be honest, their not all that different from us.

16

“Long Trade:
whenever the candle goes above the upper yellow 10 1
and is above the EMA 50
and on the 5 minute chart the candles are between mid BB and upper BB on the 20 1,
I trade in that direction.”

Just for clarification - both charts (1M & 5M) are used as confirmation before entering a trade, correct?

I only trade the NY open so in your opinion would the E/$ & A/$ be valid for that time period (8am EST to 12:00pm)? No guarantees of course. d.

17

What are your ST when you are makings such shots?

In scalping broker has big impact on result as this strategy very-very sensitive to spread. Especially, if you trade with small amount of money.

18

Yes and No, that’s where the experience and the know of the pair comes in. I mainly trade the 1M with a preferable confirmation on the 5M. I had times I could see the currency is coming up on the M1 but was still not in the upper part of the M5 yet I jump in because the move to up (or vice versa down of course) is steady. Happens much more during London open then NY time. I trade the NY time of course but it’s not as steady as the London.
Guarantee? I guarantee every body will dye one day that’s about all that is guaranteed in life:)
My main chart and trading chart is M1 then M1 then M1 and always a glance to the M5 as bonus. :slight_smile:
I also look at M15 M30 even up to monthly for general direction to be informed, once in the morning and evening. It’s enough to know what had changed during the time period. Sometimes I realize I lost a bit track of the overall trend situation because I focused to hard on the M1. Then I just click on the M5 and look quick to the higher TF’s.
It’s where the watching and slowly the realization (experience) how the pair moves is coming in.
Screen shot of my computer setup from this morning enclosed.
Sorry, can only give the way I trade experience is something everybody has to gain on his own and that takes time.
Happy Trading

Screen.jpg700×394 66.6 KB

19

scalping with a spread is very hard to overcome. if you scalp, trade futures.

20

Here a second screen-shot with the Alarm window from MT4

Screen 2.jpg700×394 64.4 KB

21

Right now on Oanda the E/$ spread is 1.0 & the A/$ is 1.5. IMO that’s tight enough for at least the 5M, I’ll have to wait and see for the 1M.

edit: I do agree that the NY is less smooth or in my parlance more “herky-jerky.”