BEST Scalping Trading Strategy For Beginners

BEST Scalping Trading Strategy For Beginners: Introduction to Trading with the Trend

I’m going to show you a strategy that involves trading with the trend. I’m going to give you a combination of indicators, a list of rules to follow, and show you a scalping strategy that has been backtested and proven to work. It works with almost all markets, all time frames, and most importantly, it works. What I see a lot of people doing is trying to buy the absolute low on a downtrend and trying to hit that exact point of a reversal. And while yes, it would be nice to hit that exact point of a downwards reversal and make a ton of money when it reverses, it’s extremely unlikely you’ll find that exact point the majority of the time. BEST Scalping Trading Strategy For Beginners I’m a huge fan of trading with the chart, not against it. What I mean by that is that  I will only enter trades if the chart is in an uptrend.

BEST Scalping Trading Strategy For Beginners: Rule Number One – Trade with the Trend

Rule number one, and probably the most important rule, is that we will only be trading with the trend, at least with this strategy. BEST Scalping Trading Strategy For Beginners You may be asking yourself, how do I know if a chart is in an uptrend or a downtrend? Well, it’s pretty simple. Just go to TradingView, click the indicators tab, and type in EMA for exponential moving average. Then go to the settings of the indicator and change the length to 200. This will give us a 200-day moving average. I’m also going to change my line to red just so you can see it better, but this is optional. So with this strategy, we will only enter a trade if the chart is in an uptrend, which means we will only enter a trade if the price is above the 200-day line. If the price is below the 200-day line, we will not enter the trade. So this is the first rule of the BEST Scalping Trading Strategy For Beginners: you must be trading with the trend, meaning we will only enter a trade if the price is above the 200-day line. Now that we know rule number one, let’s move on to the rest of the rules that must be met in order for you to enter the trade.

BEST Scalping Trading Strategy For Beginners: Rule Number Two – Use the RSI Indicator

Rule number two involves using the RSI indicator but with a twist. Go to the indicators tab and type in RSI Divergence. Make sure to pick this one right here. Next, we’re going to change the settings a bit. Go to the settings, then uncheck these bottom three checkboxes. This will clean our chart up a bit. Then go to the middle line tab and change the color to white and make it a solid line. This is just so it’s easier to see. Now, usually, the RSI indicator is used for seeing if the market is overbought or oversold, but in this strategy, we’re going to be using it to find momentum in the market. So rule number two is that we will only enter a trade if the RSI line is above the middle white line. If all the other rules are met and the RSI is below the line, we will not enter the trade. The cool thing about this customized RSI indicator is that it also shows divergence. If you don’t know what divergence is, to put it simply, without going too in-depth, it’s basically when the price is moving in the opposite direction as the indicator. So if you’re seeing higher highs on the chart and lower highs on the RSI, that’s divergence. The cool thing about this RSI indicator is it will automatically show us if bullish divergence is occurring. As a quick disclaimer though, I’ve seen this indicator messed up and not show divergence sometimes, so you may have to look yourself a time or two. Just keep that in the back of your head. But nonetheless, this is a great indicator. So this bullish divergence is not exactly a rule that we have to follow, but it’s a great sign if you see it when all the other rules are aligned.

BEST Scalping Trading Strategy For Beginners: Rule Number Three – Look for Engulfing Candles

Let’s move to rule number three. You probably know I love momentum candles. This can be a great way to find the start of a trend. The specific momentum candle we’re going to be looking for is what is called an engulfing candle. To put it simply, an engulfing candle is a candle that engulfs the previous candle. A bullish engulfing candle opens at or lower than the previous candle’s close. The length of the bullish candle body engulfs the previous red candle, then the bullish candle closes above the previous candle’s open. This is an engulfing candle, and it’s a great way to find the start of a trend. Instead of looking for this candle ourselves and just looking at the chart all day, we’re going to let an indicator do the work for us. Go to the indicators tab and type in “engulfing candle.” You’re going to choose this one right here. When you add it, you’re going to be seeing a bunch of red and green arrows. Since we’re going to be doing long trades in this example, you can just disregard the red arrows. So, all of these green arrows are bullish engulfing candles. Rule number three is we will only enter a trade if we see a green arrow.

BEST Scalping Trading Strategy For Beginners: Executing the Strategy – A Successful Trade

Now let’s go over what a successful trade would look like. One, we see the price is over the 200-day line, which implies the chart is in an uptrend. So far, so good. We then make sure the RSI line is above the 50 mark, which it is, so we’re all good there. We do not need to see a bullish divergence, but if we do see one, it’s a plus one and makes this trade even more bullish. Next, we look for a green arrow, which I should also mention right now: we will only enter the trade after the green arrow candle closes. I repeat, only enter after the green arrow candle closes. This candle could show a green arrow but then change while the candle is still forming and not end up being an engulfing candle when it closes. So, once the candle closes and there’s a green arrow, we will enter the trade. Then, for this specific strategy, we will set our stop loss to two times the length of the entry candle. We then set our take profit to a 2:1 ratio. It’s that simple, and boom, as you can see, the price hits our mark.

BEST Scalping Trading Strategy For Beginners: Managing Your Trades and Emotional Control

Now, if you’re one of those people who gets panicked easily or gets out of trades too early or late, literally just set your take profit, set your stop loss, and just close your Trading strategies computer and let the strategy do its work. This will help you stop trading emotionally and selling too early or, even worse, getting greedy and moving your take profit. It is also important to note you probably won’t be trading every day with this strategy. Since we’re only trading with the trend, the chart isn’t going to be in a trend 100% of the time, so there will be days where you simply won’t be able to trade. This is okay. You just need to understand that this is a thing, and you will only trade when the market is working for you, not against you.

BEST Scalping Trading Strategy For Beginners: Final Example – Another Successful Trade

Let’s do one more example. First, we make sure our price is above the 200-day line. We then make sure the RSI is above the 50 line. We also see that the RSI has a bullish divergence, which is not needed but it increases the chance that this will be a winning trade, so that’s good. Then, we see a candle with a green arrow under it, indicating it’s a bullish engulfing candle. We then wait for that specific candle to close. Once it does, we enter the trade. We set our stop-loss two times the length of the engulfing candle, then put our take profit mark to a two profit ratio. Then we wait. We see the price move up, hit our take profit mark, and we exit the trade. This is a great example of the BEST Scalping Trading Strategy For Beginners.