Ultra-Fast Scalping Strategies in Forex

26. Jan.

Ultra-Fast Scalping Strategies in Forex

Scalping is a high-speed trading strategy that targets quick profits from small price movements. It's a method that appeals to those who want a hands-on, immediate trading experience. This article delves into three of the best 1-minute scalping strategies: Heikin-Ashi Pullback, RSI Extremes, and Stochastic Oscillator Quick Signal, explaining their nuances and applications in a trading environment.

What Is Scalping?
Scalping is a trading strategy focused on capturing small price movements in financial markets. Traders employing this tactic aim to gain several pips – tiny increments in price – from each trade, often executing dozens or even hundreds of trades in a single day. Due to the high frequency of trades, transaction costs and speed are significant considerations.

This strategy requires a deep understanding of market trends, real-time data analysis, and a disciplined approach to risk management. While scalping is commonly used in forex markets, it's applicable to stocks, commodities, and other financial instruments.

To see how these ultra-fast scalping strategies work in practice, consider using FXOpen’s free TickTrader platform. There, you’ll find all of the tools discussed in this article waiting for you.

Heikin-Ashi Pullback


The Heikin-Ashi Pullback strategy focuses on identifying pullbacks within established trends using Heikin-Ashi candlestick charts. By pinpointing moments when the trend briefly reverses, this strategy offers traders an opportunity to enter the market with the anticipation that the dominant trend will resume.

Entry

• Traders may observe a clear trend with consecutive Heikin-Ashi candles in one colour.
  
• During a bearish trend with red candles, many traders wait for the candles to turn green, signalling a pullback. Entry is typically considered when a red Heikin-Ashi candle appears after one or more green pullback candles.
  
• Conversely, during a bullish trend with green candles, traders often wait for the candles to turn red, indicating a pullback. Entry is generally initiated when a green Heikin-Ashi candle appears after one or more red pullback candles.
  

Stop Loss

• A stop-loss is commonly placed at the high or low of the entry candle.
  
• Alternatively, traders may set it above or below a nearby swing point for additional safety.
  

Take Profit

• The position is usually closed when a single opposite-coloured candle appears.
  
• Some traders opt to exit when the trend reaches a predetermined resistance or support level.
  

The Heikin-Ashi Pullback strategy capitalises on the market's natural ebb and flow. By entering during a pullback, traders aim to benefit from the market's tendency to resume its prevailing trend. This ultra-fast scalping strategy provides a structured approach to identify high-probability entry and exit points, making it a favoured choice among scalpers.

RSI Extremes


The RSI Extremes strategy is often highlighted as one of the best scalping strategies, especially when used as a 1-minute forex scalping strategy. It uses the Relative Strength Index (RSI) with a period setting of 7 to identify potential reversals at extreme overbought or oversold levels.

Entry

• Traders typically use a 7-period RSI applied to a 1-minute chart.
  
• An entry may be considered when the RSI crosses above 80 and subsequently moves back below, indicating a potential short position.
  
• Similarly, an entry point can be seen when the RSI dips below 20 and then moves back above, suggesting a long position.
  

Stop Loss

• A common approach is to place a stop-loss a few pips above or below the entry candle.
  
• Alternatively, traders may opt for a stop-loss above or below a nearby swing high or low for additional risk management.
  

Take Profit

• Take-profit levels are generally set near a key support or resistance level.
  
• Another option is to exit the trade when RSI approaches the 50-level, signalling diminishing momentum.
  

The RSI Extremes strategy leverages the RSI's effectiveness in identifying market extremes. Traders capitalise on brief price reversals, providing a structured way to enter and exit trades in line with market momentum.

Stochastic Oscillator Quick Signal


The Stochastic Oscillator Quick Signal serves as an easy forex scalping strategy designed to capture short-term price movements. Using the Stochastic Oscillator, traders can identify overbought and oversold conditions to make timely entries and exits.

Entry

• Many traders apply a Stochastic Oscillator with settings (14, 3, 3) to a 1-minute chart.
  
• Entry points are often considered when the %K line (blue) crosses above the %D line (orange) and both are below 20, suggesting a long position.
  
• Conversely, traders may look for an entry when the %K line crosses below the %D line and both are above 80, indicating a potential short position.
  

Stop Loss

• A stop-loss is usually placed a few pips away from the entry point.
  
• Alternatively, it can be set above or below a nearby swing high or low as an additional safety measure.
  

Take Profit

• Many traders set the take-profit level when the Stochastic Oscillator reaches the opposite extreme.
  
• Another approach is to close the position when a divergence occurs between the price and the oscillator.
  

This strategy employs the Stochastic indicator, an ideal 1-minute scalping strategy indicator, for detecting quick reversals in market momentum. By employing this indicator, traders aim to take advantage of brief oversold or overbought conditions to make rapid gains.

The Bottom Line
Navigating the fast-paced world of scalping can be challenging, but with the right strategies and tools, it's possible to find success. Each of the strategies discussed offers a unique way to approach the market and seek out profit opportunities. Still, it’s worth noting that they should be modified in accordance with a trader’s unique trading approach.

For traders eager to put these strategies into practice, consider opening an FXOpen account. You’ll gain access to hundreds of markets, competitive trading costs, and lightning-fast execution speeds – all crucial aspects for scalping trading success. Good luck!

This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.