`One of the smartest things I have ever heard when we talk about trading and business in general goes "Fail to plan and you plan to fail". Of course having a plan doesn't automatically translates into success and profit. But even if you lose money, you can be at peace with yourself because you developed a plan and followed it. Of course, modifications and fine tuning of your trading plan will also help.
So, what is our plan ? I have defined a scalping strategy which consists of three basic elements:
- The price has to be in a clear downtrend. Usually, the price breaks the support, clears stops and then reverses and tests the resistance i.e. previous support.
2) Hammer candlestick pattern
- A bullish reversal pattern which consists of a long lower wick which is at least two times smaller than the body of the candle. The close should be at top of the candle.
- The volume has to be higher than for the previous candle, which usually is a red candle. The bigger difference between volume in these two candles, the greater reversal will be.Charts
EURUSD 5 min chart
GBPUSD 5 min chart
USDCAD 5 min chartTrade management
Good charts will help you a lot and create a great…