Dec 16 2019 6

Forex scalping strategy or One minute strategy strategy, like all other forex trading strategies, has its own advantages and disadvantages. These advantages and disadvantages depend on each Forex trader using that trading style, and the knowledge that they are applying.

In this article, we will focus on this one minute trading strategy and show you how to use it effectively and profitably.

In case you're interested:

one minute strategy

What is the One minute strategy?

One minute strategy is a trading strategy where investors only trade within a profit range of 7 - 10 pips. Since this is a fast trading strategy, investors need to enter and exit orders correctly every pip. You absolutely must not keep orders for a long time. Traders will trade on the M1, M5 or M15 timeframe.

Because trading on small time frames, investors need to choose forex pairs with low spreads such as pairs: EURUSD, GBPUSD, USDJPY, AUDUSD or USDCHF.

Notes for One minute strategy

This One minute strategy needs to use the following elements:

  • Technical indicators: Investors use the indicator to determine support and resistance levels, if any.
  • Trading session: Asian Session, European Session and American Session are the most suitable (every Trader will have a trading habit with a certain session).
  • Currency pairs: Investors should use currency pairs with low and stable spreads. Especially currency pairs with stable spreads when there is news.

Principles of One minute strategy

For Buy order

Based on the indicator that determines the Resistance - Support level, you can determine the Resistance level. After identifying the resistance level, now you need to wait for the M1, M5, or M15 candle to close above that level.

one minute strategy

After the closing candle appears above the resistance level, we will enter a Buy order as soon as the candle closes. (direct order to the market)

Set a stop loss about 5-7 pips away from your entry price.

Our profit target is also around 7-10 pips per trade. (do not get greedy)

For Sell orders

Investors also rely on the Resistance - Support levels to be able to identify the Support area. After identifying the Support level, now investors need to wait for the M1, M5, or M15 candle to close below that level.

After the closing candle appears below the Support level, we will enter a Sell order as soon as the candle closes. (direct order to the market)

Set a stop loss about 5-7 pips away from your entry price.

Our profit target is also around 7-10 pips per trade. (do not get greedy)

The One minute strategy is only applicable on small timeframes. One minute strategy is also relatively difficult, not simple. Investors should practice carefully on the demo account first.

Advantages of One minute strategy

At its core, One minute strategy is an extremely short-term trading strategy, so the trader (and the equity in the trading account) is psychologically susceptible to rapid market movements.

Typically, a short transaction duration insulates a trader from the larger systemic risks in the market and limits the potential liability of each trade.

Another advantage is the trader's ability to profit from revolving or slow markets.

While it is true that the most volatile and liquid markets are the primary goal of many trades, trading with the goal of capitalizing on small market moves can prove to be profitable on the market. fixed market.

Often, trend or momentum-based trading methodologies struggle, when faced with markets stuck in consolidation or pivoting phases. In these market states, the price movement is limited, as the price movement is not strong enough to achieve the required profit target. One minute strategy eliminates the need to move the market in the direction of profit, because small price fluctuations are enough to gain profits and maintain a scaled approach.

Disadvantages of One minute strategy

The obstacles to using the One minute strategy ratio-based trading method are many and closely related to the discipline and psychology of the trader.

The essence of One minute strategy is to take small profits quickly to limit risk and generate a consistent revenue stream. However, in pursuit of small profits, traders must anticipate potentially profitable trending markets, in addition to trends. In turn, a trader can continuously “miss out” on trends and profits while sticking to the One minute strategy. Over time, the fear of missing out on these moves can affect the trader's psyche.

Another downside, when using the One minute strategy, is the increased leverage usage. In order to get a profit on a certain trade, traders often use a large amount of leverage to increase profits. Trading small amounts of ticks, pips or points often goes hand in hand with adding several contracts, lots or shares to the trade. Leverage acts like a double-edged sword. In the event that a transaction fails immediately, the potential liability grows exponentially.

Analysis for One minute strategy

One minute strategy comes in many forms from simple to extremely complex. However, regardless of the adjustment parameters, One minute strategy is designed to continuously take small profits from the market. This involves the implementation of stop loss, profit target and trade timing.

Fundamental Analysis: While commonly used in long-term trend following or reversal strategies, fundamental analysis can also be applied to One minute strategy. Among the tactics, traders use fundamentals by analyzing the impact of a scheduled economic data release or an unexpected event.

Technical Analysis: This is the most popular strategy in One minute strategy. Indicators and tools are easily applied to the price action itself, providing entry and exit points to the market.

Combined Analysis: A combination of elements of both fundamental and technical analysis. An example of an association analysis would be to use fundamentals to determine optimal trading conditions, before deploying techniques to refine market entry/exit.

Conclusion

Finding solid opportunities in the market is not a simple task. However, through the application of fundamental, technical or a combination of analysis, a trader can identify an effective One minute strategy and the right conditions to generate success.

author

Mario Draghi

Hey, I’m Mario Draghi. I’m a writer currently resided in Thailand. For my forex experience, I have been working with brokers and trading for 5 years. Hope that you'll enjoy my articles about all forex-related matters.


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6 Comment

Aidan

May 01 2020

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Mar 19 2020

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Tisha

Jan 15 2020

I couldn?t refrain from commenting. Well written!

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