There are so many differ trading style’s are avail in the financial market those trader’s does use to make money consistently from the market and scalping trading style is also one of them. This is a trading style in which a trader has always an aim to get quick profit from the market patterns, or from a trading strategy. Scalping trading is an very profitable trading style as well as its one of the dangerous style if a trader does not have proper idea and understanding of it.
Because the trading style does not give us a longer time to hold our trades and according to the rules we have to cut down our profit very quickly and its important to know that when to enter and when to exit in this strategy properly. Along with it we have to understand the price which is the main thing here, if once we have a good idea that how the price react in a uptrend, downtrend, sideways then this strategy can be very profitable in average.
Trading with scalping is not an easy task, it can take a very long term experience of financial market to understand the exact use of a scalping trading strategy.Our entry and exit both play an vital role in this strategy and they should be planned very well before the action otherwise later it would not give you much time to do changes in your existing order.So we would suggest trader’s to do proper training and practice before using any kind of scalping strategy in your real trading account.Let’s have a look on differ types of scalping trading strategies based pattern’s those we are using in our trading since a long time they are as follows:
- Candlestick Scalping Trading Strategy: Candlestick Scalping trading strategy is one of the very effective trading strategy which has a great pontential to take the advantage of reversal market patterns, during a downfall we have to just wait for couple of good confirmations of candlesticks or we can say a reversal sign of candlestick which can help’s us to gain a good amount of pips from the recovery phase of the market which may come during the uptrend or downtrend. Lets check with some of the example’s:
This is one of the greatest example of following this trading strategy as for our buying and selling, as shown above in the picture we have to just wait for the one single red bar breakout confirmation for our buy, make sure that there should be only one single red bar and the previous and next candle should be green only during a buy. This is an example of buy, and for using this strategy as a sell you have to do opposite of it you have to follow one single green bar for a sell. Furthermore visit our day trading strategies page where we have talked about the single bar method trading strategy in deep.
This strategy does work very powerfully whenever we has a sideways market birth after a dowtrend, because then it give’s us a great chance to make good money from the reversal movement of the market and this is also very clear that no market can drop down with a single line, every kind of financial market has a reversal wave during a downtrend or uptrend and that can be used for our scalping. Even trading strategies are a lot for scalping those can be traded in trending market too. We will discuss about them later, Lets take some of the another example of candlestick reversal trading strategy.
This is another example shown above in the chart, another good entry after a downside movement and a great amount of pips can be seen over there. Make sure that if the trend is very powerful during the downfall that time this strategy would not work properly and so many false signals you may get on chart. There is no strategy avail in the market which can be a holy grail system of making money every trading strategy has its pros and cons. But overall if you are using this strategy at the ending stage of a downtrend then may be this strategy can be profitable for you.
Regarding the stop loss we would say that use the lower body of the red candle or you can use the last support area below that red candle for your stop loss. Now it’s totally depend upon you that how you use filter the trading signal and for that you can use so many other tools, like trend lines, divergence, macd indicator, breakout analysis etc. Risk and reward you can follow the 1:1,1:2 or you can use the other side one green candle reversal sign for your exit from the market.