I will go over the best 1-minute scalping strategy for trading in this article. Each of these strategies can be used to trade stocks, commodities, cryptocurrencies, equity, or forex.
New and inexperienced traders are constantly looking for ways to improve their trading strategies. One of those really popular strategies is scalping and I will show some 1-minute scalping strategies in this guide.
I will walk you through the following steps below:
Before that, you should also check this 5-minute scalping strategy that comes with an expert advisor and indicator
How Does Scalping Work?
1-minute scalping is a forex trading strategy that allows traders to buy or sell a currency pair and then hold it for a short time in order to make a profit.
While scalping aims at small gains of 5 to 20 pips per trade, profits can be increased by increasing the position size. The fundamental assumptions of scalping are as follows:
- Lessened exposure limits risk: A brief exposure to the market reduces the likelihood of encountering an adverse event.
- Smaller moves are easier to obtain: A greater imbalance of supply and demand is required to justify larger price changes. For example, it is easier for a stock to move $0.01 than it is to move $1.
- Smaller movements are more common than larger ones: A scalper can profit from numerous small movements even in relatively quiet markets.
To better understand scalping, let’s look at 1-minute scalping strategy variables.
Scalping Strategy – Example 1
When used correctly, this one-minute scalping strategy is extremely simple to learn and can be extremely profitable. You must consider the instruments you will trade, as well as the time frames, indicators, and trading sessions:
- Instruments: Trade any currency pair that is currently trending;
- Time frame: Set your chart to 1 minute;
- Indicators: Stochastic 5, 3, 3 and 50 EMA, 100 EMA* (available on MetaTrader 4);
- Preferred sessions: London, New York (high volatility).
While this scalping strategy can be used with any currency pair, it may be easier to use with major currency pairs because they have the lowest spreads.
Furthermore, this strategy may be most effective during high volatility sessions, which are typically New York closing and London opening hours.
How To Get Into A Long Position
Now that you’ve used the indicators and your chart is clear, let’s go over the signals you will need to open long positions with this simple 1-minute scalping technique.
The first EMA (50) must be above the second EMA (100). In this case, it is critical to wait until the price returns to the EMAs. The stochastic oscillator is then used to cross the 20 steps from below.
When you see the three elements correctly arranged, you can open a long (buy) order.
In summary, the long-order signal is as follows:
- When a 50 EMA (Exponential Moving Average) indicator exceeds a 100 EMA indicator, you should be prepared to place a long order.
- Then, open a long position if the price you want to execute the order at is near the EMA indicators and the Stochastic rises above the 20 level.
To reduce your risk, you can also set a stop loss at 2-3 points below the swing’s last low point. Because the 1-minute scalping strategy is for a short time, you can expect to gain between 8 and 12 pips when trading.
As a result, take profits should be kept between 8 and 12 pips from the entry price. If all three of these occur, you now have the opportunity to open a buy order (long position), which is fantastic!
How to Apply for a Short Position
To enter a short trade, place the first EMA (50) below the second EMA (100). We wait until the price returns to the EMAs, as we did with the buy entry points.
The stochastic oscillator is also used to cross level 80 from above. You can open a short or sell order immediately once all positions are in place.
The same thing happens here. To summarize, the short-order signal is:
- Use the same strategy indicators in reverse order to determine when to execute a short order;
- The 50 EMA indicator should be below the EMA 100, and the spot price should be close to these lines;
- The stochastic should drop below 80 EMA.
Stop losses should be placed approximately 2-3 pips above the swap’s last high point, and take profits should be within 8-12 pips of the entry price.
Stop-Loss and Take-Profit Points
The SL and TP levels for this strategy are as follows:
- Take-profit: The ideal take-profit level for this strategy is 8-12 pips from your entry.
- Stop-loss: Stop-loss orders should be set two to three pips below or above the most recent swing level.
Scalping Strategy Sample 2
This strategy is simpler to understand and implement, so let’s get right into what you’ll need to make it work:
- Instruments: Assets with high volatility (for example, currency pairs such as the EUR/USD)
- Time frame: The thirty-minute and one-minute charts are required for this scalping strategy.
- Indicators: You will only need the Bollinger band set up for this strategy.
- Sessions: Once again, the New York and London sessions are ideal for this strategy.
How to Place a Long or Short Position
To enter a position using this strategy, you only need to be aware of two things, which I have grouped.
- First, use the 30-minute timeframe to determine the trend and market conditions.
- If the price is rising, you should enter a buy position once it has breached the lower Bollinger band.
- If the price is downward, you enter a sell position when the price breaks through the upper Bollinger band.
Take-Profit & Stop-Loss Levels
- Profit targets, as shown in the chart, should be where the price touches the opposite Bollinger band.
- Stop-loss orders should be placed 2-3 pip above or below the candle that broke the Bollinger band.
Of course, there are benefits and drawbacks to all trading strategies, and one-minute scalping trading strategies in the forex market are no exception.
Advantages Of Scalping
To determine whether 1-minute scalping and Forex 1-minute scalping can benefit your trading style, we will examine the benefits and drawbacks of scalping. First, consider the benefits:
- Finally, the strategies offer a large number of potential entries throughout the day.
- Reduced risk exposure, as a short market presence, reduces the possibility of encountering negative events. Because the trade is only open for a short time, the risk is kept to a minimum.
- Smaller movements are easier to achieve, implying that a greater imbalance between supply and demand is required to ensure larger price changes.
- The main reason for scalping is that smaller movements occur far more frequently than larger ones. Because the trading plans are smaller in size, they allow for more frequent trades.
- Even when markets are relatively calm, a good Forex scalper can profit from numerous small movements.
Disadvantages Of Scalping
These benefits may sound appealing, but it is also important to consider the disadvantages:
- A substantial deposit is required.
- Bankers and traders have an advantage over amateur scalpers because they have more market knowledge. Novice scalpers may be at risk of losing if they haven’t done extensive backtesting.
- A one-minute scalp necessitates quick reflexes, good instincts, and mathematical abilities.
- Scalping while maintaining a good risk/reward ratio can be difficult. For example, with a 2:1 ratio, your take profit at 10 pips necessitates a stop loss at 5 pips, which is too close to call in most cases.
- There is a high possibility of multiple consecutive losses.
- These strategies necessitate a significant amount of time spent in front of the charts. 1-minute of scalping takes time and can be stressful.
The Best (and Worst) Times For 1 Minute Scalping
Scalping is a trading strategy that necessitates a lot of price movement and volatility. The trading sessions in London (08:00 – 17:00 GMT) and New York (13:30 – 22:00 GMT) have the highest levels of volume and liquidity, making them especially appealing to scalpers. It also depends on the scalping strategy you employ.
Trading false breakouts during an Asian trading session can be profitable because the price typically moves in a relatively narrow range.
Scalpers must be mentally fit and focused when scalping. Any signs of exhaustion, illness, or distraction are grounds for a trading halt and a break.
You should remember that CFD and the 1-minute scalping is not suitable trading style for everyone. Some traders will thrive on it, while others, such as swing traders, will fare much better over longer time periods.
In addition to sufficient price volatility, as previously stated, it is critical to have low costs when scalping. Typically, the lowest spreads are offered when there is a high trading volume.
Frequently Asked Questions on 1-Minute Scalping Strategy
What Are The Most Common Mistakes Traders Who Use A 1 Minute Forex Trading Strategy Make?
Emotional trading may be one of the most common mistakes with such time frames. Every trader makes mistakes at some point, and it is critical to limit losses to a predetermined number of pips.
If a market participant disregards this, potential losses can quickly spiral out of control. It is possible that one such losing trade will eventually offset several winning trades, which can be very frustrating and demoralizing.
Another common mistake in this type of trading is failing to account for the size of the spreads. Several minor currency pairs are quite volatile and interesting to trade; however, they also have larger spreads, which may reduce a trader’s potential payouts over time.
What Distinguishes a 1-Minute FX Strategy From a 15-minute Scalping Strategy?
These two methods are very similar and fall under the scalping strategy category. The only difference is that the 1-minute scalping strategy may be more stressful for some traders due to the need for rapid decision-making and trade execution.
Another thing to consider is that traders may set less ambitious profit targets with a 1-minute trading strategy timeframe, as opposed to a 15-minute option, because currency may be less volatile in such a short period of time.
What Are The Advantages And Disadvantages Of Trading Forex With One-Minute Strategies?
One of the benefits of a 1-minute strategy is that the frequent circulation of trading capital can provide the opportunity for higher returns. Furthermore, traders who use this style avoid overnight rollover charges, which can add up to a significant amount.
Finally, as previously stated, many scalping strategies do not require complex analysis and can be implemented even by traders with limited experience. Clearly, one-minute chart trading strategies have drawbacks.
For starters, scalping can be very stressful and exhausting for many traders because such trades require constant attention. Another issue is that frequent trades frequently result in high spread expenditure.
Furthermore, this type of trading necessitates a good, consistent internet connection and adequate hardware performance; if a trader has a problem with at least one of these, he or she may suffer significant losses.
What Distinguishes The Exponential Moving Average From The Simple Moving Average Indicator?
To begin, the SMA and EMA are two of the best indicators for the 1-minute chart. The Simple Moving Average (SMA) is a moving average that tracks the average closing price over the last number of periods.
For example, the 50-day SMA will show the average closing price over the previous 50 trading days, with all of them given equal weight in the indicator.
The Exponential Moving Average (EMA) is a similar measure, but it differs from the SMA in that it gives more weight to recent prices, so it is generally faster to react to the most recent changes in the market.
Is There Such A Thing As An Effective 1 Minute Forex News Trading Strategy?
Traders can succeed in any environment, in theory. However, many of them avoid trading major announcements because it is notoriously difficult to predict the direction of the currency pair.
Even if the most recent Gross Domestic Product (GDP), Consumer Price Index (CPI), or interest rate decision meets or exceeds market expectations, it does not always imply that the currency in question will appreciate as a result.
This can be explained by the fact that this particular outcome was already priced in, so it may stagnate or even decline after the announcement.
This is where the well-known Forex adage “Buy the rumor, sell the fact” comes from. Another major issue is the possibility of significant losses. Following such significant announcements, currency pairs may move over 100 or 150 pips in less than a minute.
As a result, under those conditions, traders may be unable to limit their losses to just 3 or 5 pips. The only potential benefit here is that if a trader correctly predicts the move, potential gains can be as large as described above.
This, however, is more akin to a 50/50 guessing game than a viable trading strategy.
Also Read: 50 Pips a Day Forex Trading Strategy
1-Minute Scalping Strategy Conclusion
On the surface, scalping strategies appear to be simpler and more profitable than swing trading because traders can collect a full day’s profit in just a few minutes.
However, implementing 1-minute scalping strategies can present unexpected challenges. As a result, it is important to understand that scalping strategies are only appropriate for certain types of traders. Successful scalpers must demonstrate:
- A high level of discipline is required, as well as the willingness to always adhere to the parameters of a trading system.
- Scalpers are frequently required to make critical decisions without hesitation.
- Simultaneously, scalpers are adaptable and can distinguish between a profitable trade and one that isn’t.
Finally, a successful scalper is someone who can play to the market’s strengths and exit trades at highly advantageous times.