We’re using the exponential moving average (EMA) and not the simple moving average (SMA). We’ll only take trades in the direction of the short-term trend. Similarly, a cross of the 50-period EMA below the 100-period EMA signals that average prices start to drop and that a short-term downtrend is about to form. If the faster 50-period EMA crosses above the slower 100-period EMA, this reflects that average prices are starting to rise and that an uptrend is likely to establish. The 50-period EMA is faster than the 100-period EMA, which means that it reacts to price-changes more quickly. The 50-period EMA calculates the average price of the past 50 minutes, while the 100-period EMA calculates the average price of the past 100 minutes. The two moving averages are used to identify the current trend in the 1-minute timeframe. Let’s take a look at the 3 main steps of our 1-minute Forex scalping strategy. Stochastic oscillator with a setting of (5,3,3).Here’re the indicators and their setting that you need to apply to your chart: The strategy uses two moving averages and one oscillator. Also, most US market reports are released early in the New York session, creating market volatility and increasing the profit potential of your trades. These few hours (from 8:00 AM to 12:00 PM EST) offer the lowest trading costs and highest liquidity which is very important to scalpers. That’s why I recommend to make the bulk of your scalping trades during the New York-London session overlap. You can use this trading strategy around the clock, but the best results are usually generated during volatile market conditions. Still, you need to apply strict risk management rules and only risk a small part of your trading account if you want to become successful in the long run. This strategy is based on both trend-following and mean-reversing, which lowers the number of false signals to a minimum. In the following lines, we’ll cover a simple yet effective Forex scalping strategy on the 1-minute timeframe. Learn more, take our premium course: Trading for Beginners.
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