One of the most lucrative types of trading is probably scalping. With scalping, a trader is able to enter and exit the market in a very short period of time, make money within minutes, sometimes even less. Imagine having the opportunity to incrementally grow your account multiple times every day. This may be just a few dollars, but by doing several times, an operator would have the ability to accumulate a substantial amount at the end of the day.
But scalping that is not easy. Many traders also try to avoid scalping knowing the greatest degree of risk it brings with it. Often, a trader has less time to analyze the thesis of a trading facility when scalping compared to day trading or swing trading. Add to this the fact that due to the minute this price moves makes it at the lowest terms, it is even harder to overcome the spreads, commissions, and other costs of a transaction.
For successful scalp in the forex market, you would need a strategy that addresses both of these obstacles. You would need a simple trading facility that is very easy to analyze and a strategy that allows you to earn as much seed as possible for the lowest risk placed on the market. There are several strategies that do this, but impulse trading is one of the best types of strategies to do this.
Momentum candle
So, what is a boost candle? Before we get there, let's first define what an impulse is. Science would tell us that momentum is the result of speed and mass. In trading, this means that the price has moved up or down a considerable distance over a very short period of time, and with the volume behind it.
How about momentum candles? Basically, it is a candle that represents strength. It is strong enough to cause either a slow market to break into a trend, reverse a current trend, or hold a market currently trending higher. It is identified by a feature - size. Momentum candles are large and long, full-bodied candles. At any moment, we see this type of candle appearing out of nowhere, we must prepare for action that may follow it.
Trading Concept Strategy
This strategy is hinged on trading around a push candle.
Coming from a relatively slow moving or normal market, once a candle boost appears, which is substantially larger than the previous candles, we are ready for the price action that could follow.
How big a candle are we looking for? This is not a hard and fast rule because different currency pairs and markets have different ranges. But for example, in a market where price moves 1.5 to 3 pips within a given candle 1 minute, a candle that is 10 pips in length and is stocky could be considered a boost candle.
The impulse movement could also be some long candles, two, three, even five long candles, while candles are characterized as momentum candles.
After this momentum boost, we will be watching for a price to redo for some candles. It should be short and shallow, not 10 retracting sails and should be only less than 30% of the impulse thrust. After the retracement phase, we will wait for the price to roll back over signaling a likely resumption of momentum. Then we could set up our trading stop orders using.
Deadline: 1-minute or 5-minute chart
currency pair: major pairs and some volatile crosses
Trading session: whenever the currency market to be opened is open.
Buy (Long) Setup Trade
Input:
A high dynamic candle or impulse should appear should appear approximately around 3 to 5 times the size of preceding candles.
Wait for price to redo with small low sails
Price should not redo more than 30% of the momentum
Wait for some price signals to resume trend
Just as some small upbeat candles appear a buy stop entry ordering a few pips above the high swing
Stop
the loss of Set stop loss just a few pips below high balance.
Output
If the price makes another strong boost on the rebound, drag the stalled loss for approximately the same distance as the initial stall loss.
Sell (Low) Setup Trade
Input:
A dynamic low or pressure candle should appear should appear approximately around 3 to 5 times the size of preceding candles.
Wait for price to remake with small upbeat candles
Price should not redo more than 30% of the momentum
Wait for some price signals to resume trend
Just like some small pessimistic candles seem to place an order entry stop selling a few pips below the low balance sheet.
Stop the loss of
Set stop loss just a few pips above low balance
Output
If the price makes another strong boost on the rebound, drag the stalled loss for approximately the same distance as the initial stall loss.
Conclusion
This strategy is a commonly used dynamic strategy used by many day traders and traders. However, this same concept can also be applied in some balance sheet trading strategies.
Some variations of this strategy involve taking a market order at candle close. Some also use a fractal stop loss made by retracement. Other traders also set a fixed take profit target based on a previous support or resistance level.
This variation in trading dynamics, however, is a very aggressive type, with tight stop losses and trades coming out by dragging the stop loss. Some could even go as far as manually closing trade like price stalls. But it depends on you, what you prefer.
But scalping that is not easy. Many traders also try to avoid scalping knowing the greatest degree of risk it brings with it. Often, a trader has less time to analyze the thesis of a trading facility when scalping compared to day trading or swing trading. Add to this the fact that due to the minute this price moves makes it at the lowest terms, it is even harder to overcome the spreads, commissions, and other costs of a transaction.
For successful scalp in the forex market, you would need a strategy that addresses both of these obstacles. You would need a simple trading facility that is very easy to analyze and a strategy that allows you to earn as much seed as possible for the lowest risk placed on the market. There are several strategies that do this, but impulse trading is one of the best types of strategies to do this.
Momentum candle
So, what is a boost candle? Before we get there, let's first define what an impulse is. Science would tell us that momentum is the result of speed and mass. In trading, this means that the price has moved up or down a considerable distance over a very short period of time, and with the volume behind it.
How about momentum candles? Basically, it is a candle that represents strength. It is strong enough to cause either a slow market to break into a trend, reverse a current trend, or hold a market currently trending higher. It is identified by a feature - size. Momentum candles are large and long, full-bodied candles. At any moment, we see this type of candle appearing out of nowhere, we must prepare for action that may follow it.
Trading Concept Strategy
This strategy is hinged on trading around a push candle.
Coming from a relatively slow moving or normal market, once a candle boost appears, which is substantially larger than the previous candles, we are ready for the price action that could follow.
How big a candle are we looking for? This is not a hard and fast rule because different currency pairs and markets have different ranges. But for example, in a market where price moves 1.5 to 3 pips within a given candle 1 minute, a candle that is 10 pips in length and is stocky could be considered a boost candle.
The impulse movement could also be some long candles, two, three, even five long candles, while candles are characterized as momentum candles.
After this momentum boost, we will be watching for a price to redo for some candles. It should be short and shallow, not 10 retracting sails and should be only less than 30% of the impulse thrust. After the retracement phase, we will wait for the price to roll back over signaling a likely resumption of momentum. Then we could set up our trading stop orders using.
Deadline: 1-minute or 5-minute chart
currency pair: major pairs and some volatile crosses
Trading session: whenever the currency market to be opened is open.
Buy (Long) Setup Trade
Input:
A high dynamic candle or impulse should appear should appear approximately around 3 to 5 times the size of preceding candles.
Wait for price to redo with small low sails
Price should not redo more than 30% of the momentum
Wait for some price signals to resume trend
Just as some small upbeat candles appear a buy stop entry ordering a few pips above the high swing
Stop
the loss of Set stop loss just a few pips below high balance.
Output
If the price makes another strong boost on the rebound, drag the stalled loss for approximately the same distance as the initial stall loss.
Sell (Low) Setup Trade
Input:
A dynamic low or pressure candle should appear should appear approximately around 3 to 5 times the size of preceding candles.
Wait for price to remake with small upbeat candles
Price should not redo more than 30% of the momentum
Wait for some price signals to resume trend
Just like some small pessimistic candles seem to place an order entry stop selling a few pips below the low balance sheet.
Stop the loss of
Set stop loss just a few pips above low balance
Output
If the price makes another strong boost on the rebound, drag the stalled loss for approximately the same distance as the initial stall loss.
Conclusion
This strategy is a commonly used dynamic strategy used by many day traders and traders. However, this same concept can also be applied in some balance sheet trading strategies.
Some variations of this strategy involve taking a market order at candle close. Some also use a fractal stop loss made by retracement. Other traders also set a fixed take profit target based on a previous support or resistance level.
This variation in trading dynamics, however, is a very aggressive type, with tight stop losses and trades coming out by dragging the stop loss. Some could even go as far as manually closing trade like price stalls. But it depends on you, what you prefer.
