today we will talk about five minutesscalping strategy with the good risk reward ratio hello traders, welcome to my channel.
My name is Liam from StayGreen even if you're completely a beginner but at some point I guess you ever heard about the term “scalping” basicallyit is to get in and get out market really quick with a small profit butthis trading style require you to have a certain amount time in the day to stickto price chart, monitor and execute order and if you dont have like.
few hours perday for this trading style then probably it is not really fit you.
if youlike a system that I introduced in my channel please like and subscribe thechannel and hit the bell button there's couple of things that pleasekeep in mind for you start trading using you know, scalping caneasily turn into gambling aggressive traders with a little bit luck winseveral trade he can easily turn it to gambling, executing position ispurely based on his feeling with the market that's very dangerous habit forthis market so try to improve your discipline and try to follow all therules and system second scalping is one of the strategy that often comes with a bad risk reward ratio, there are many traders ready to sacrifice 100 pips just for onetwo pips in profit and you know with just 1 2 bad trade that hit stop loss you maylost one day two days or the whole week that you collect profit, another point whenyou do scrapping is try to lower your lot size, smaller lot size helps you toreduce your lost, you should not have the thinking like “oh damn if I lower my lots then the profit will be smaller”, think about the lost as well, another plus point from trading with a lower lot is you psychologically will feelless stress when you're trading with smaller lot and that will benefit youfrom being more confidence and from being confident you stick to rule andyou'll be more discipline time after time, yeah so all I want to say ispracticing practicing do not risk too much and be disciplined, stick withthe rules, that's a crucial thing keep in mind when you do scalping okay now let's jump to the entry, whenand where to enter the market, now with this strategy will rely on exponentialmoving average as you know single moving average helps us to see the generaldirection of the market, however a lot trader typically used more than two orthree EMA, the system we're going to use three EMAs and that will allows us toestimate the trend intensity of the market, so here we have 5mins chart ofthe EURUSD, as you can see the chart very simple very basic with greencandle in the black background, there's no such complicated indicators that isneeded so for the system you can use on any Android or any iOS devices becausethe Moving Average is already included and the setup for the indicator is verysimple, so on the chart you can see three moving average the 8, 13, and 21 periodsaverage, the 8 period EMA gives me the short-term trend, 13 and 21 period EMA gives me the manually longer-term trends of course is it my preference I preferto use short term EMAs to try to eliminate the lagging and delay of theindicators for the such short frame any number period combination can beused depend on the type of set up you're looking for and the time frame you aretrading so feel free to use other moving average you don't have to use the exactsetup, looking back to the chart, notice how price push about the 3 EMAs in thisperiod, the price staying above the 8 EMA most of the time, the fact thatall three EMAs were trending higher at around like 45 degree angles during theadvanced or very bullish will be the image we will be looking for on our chart to find chances to enter market, all three moving average inagreement in line and almost parallel with strong trend consensus, right hereyou can see the price actually broke below the 8 and 13 EMA and not yet reachto 21 so this area signal the bullish is in a rest, or some may call this pullback, it broke below the 8 and 13 EMA before resuming the trend at that point it confirmthe direction of the market so after we identify the main trend with away for the pullback so we'll search for pullback trade to pinpoint undervaluedand overvalued entries into an established trends, so I will find opportunity when price is considered over value and the value asthis present excellent opportunity to buy low during uptrend and sell high during down trend, the idea of the pullback trade is to buy the market atthe discount during an uptrend sell market at the premium during a down trend, the pullback trade is take advantage of the situation when price isin an established trend either bullish or bearish, and three moving average areindicating the same direction any pullback in the first or second EMA (8 & 13) offer buying or selling opportunity in the direction of established trend, this setupis effective because it forces you to buy below value and sell above value whilekeeping you discipline, we already identified the main trend so how toenter the trade, so the first step and the most important one is to identifythe current trend of the market, I know that I'm repeating myself but I want this tobe crystal clear: all three EMAs must be trending in the agreement in a bullishor bearish manner, ideally you want to see all three EMA is trending at a 45 degreeangle which identifies a strong trend that's first step, the second stepinvolves waiting for the market to pull back to test either 8 or 13 EMA, the candlecan close beyond the 8 or 13 EMA but cannot cross over the 21 EMA, once theprice test either 8 or 13 EMA, we need price confirmation, the entry istriggered when price crosses the previous high of the trend so usually I use pendingorders in this case now we already entered market and here'show you manage the trade, there are many tactics that can be used for thepullback trade, before you select the type of exit strategy, you should firstremember you're scalping, the room for error is extremely small, let me repeatthat, margin for error is very small when you trade with high leverage whilelooking for a small profit, okay for stop-loss, once in a trade I immediatelyset my stop loss right below the low the pullback that I'm trading, therefore yourstop-loss would be beneath the low of the bar that test the 8 or 13 period EMA, just couple pips below so um what's the psychologybehind this trading technique, well we try to take advantage of the new tradersshot in the market, below 8 EMA think about it, we are practically waiting forthe price to go to close below the 8 EMA but new traders, when they see priceclosing below the 8 EMA, they immediately short the market they don't care about thegeneral trend see the price below 8 EMA and enter the short, that's why we waitfor price to return above the 8 EMA we want to have trapped traders below us tofuel our long positions, here's what I do when I'm scalping, I move stop loss to breakeven as soon as possible, you want to minimize your risk, you'll get stopped out alot at the break even, trust me, from my experience, it is better that we have five tradesin a row with zero profit rather than five losing trade, that's ugly face ofscalping, it's very unpredictable and any price swing can hit your stop-loss anytime, that's why I love to play the break-even trade whenfive or six pips in profit I'll immediately move thestop-loss to break even, you'll be frustrated when you have five pips in profit, move stop-loss break even in the market hit your stop-loss, thencontinue in your initial directions it happens all the time but with thistactic it will protect you in the long run and if you have bigger risk appetitehere are some other tactics you can use to take profit first you can usetraditional trailing stop or fix profit target, ratio could be 1:1 or 1:2 or you can exit at the next support or resistance levels or use the FibonacciExtension if you trade with the fibo numbers now let's have a look at some otherpairs to give you a better idea of what we should look for on the chartlet's go with EURJPY same 5 minute time frame, let's have a look fortoday today chart is so far not really ideal, actually in this period there'scouple chance that we can enter the market can actually enter here, nice, herewe go yeap, it's very strong bullish trend andit met all two requirements we had a market that I mentioned before so hereyou can find price, there is a pullback, price crossover the 8 EMA butnot even yet touch the 13 and resume the trend same here we have another pull backtouch 13 EMA and resume the trend, same here is a trend so here we have threechances to enter the market very simple, keep it simple and here is another example ofthe same pair EURJPY, M5 very strong bullish trend, there's the pullback, we will not enter the market in here, in this condition itdoesn't meet the two criterias in here, um, it's not so clear the pullback here, soI might skip this chance in here alright let's try another pair let's findanother example from the GBPUSD in here you can find opportunity to enter the market it's notreally clear here to pull back so there's no entry toenter the market and of course, there's many way to improve the system to increase the winning rate so please guys, have a look at this system, try on demo accounts, leave a comment and let us know your opinion on how to improve the winning rate.
If have you have any requests on any other systems, any indicators, justleave comment I'll try my best and that is it for this video I hope you enjoy itand hope it is helpful & profitable for you guys thank you for watching and I'll seeyou in next video Happy Trading and Stay Green.