How to improve your 1-minute chart scalping performance
Scalping on a 1-minute chart can be very profitable in certain market conditions for skilled traders. When using a 1-minute chart, there can be many trading opportunities; through leverage, traders can achieve high profits.
While 1-minute scalping is attractive, it can also be dangerous for those traders who do not have a well-thought-out strategy.
Below are some tips to improve your scalping performance on a 1-minute chart.
Choose the right market
It is essential to choose a market that has both high volatility and narrow spreads. High volatility will increase the chance of finding profitable trades using a 1-minute chart. Conversely, when volatility is low, it is unlikely technical analysis will be successful and lead to losses.
Scalping requires many trades to make profits, so choosing a market with a narrow spread will reduce your costs. When selecting a market, compare the volatility and spread rather than focusing on trading the market with the highest volatility.
USDJPY, GBPJPY, Gold, Dow Jones, and WTI are all examples of markets popular for 1-minute scalping traders. However, market volatility changes over time, so it is best to analyze recent volatility before choosing a market to trade.
Always set stop-loss orders
Scalping is attractive as your profit target is small, and you can quickly make profits. Making many profitable trades in a row can be easy as you only need a small market move to hit your target. It can be tempting to set a large stop loss order or not use a stop loss order at all when scalping.
While using a stop loss can reduce your profits in the short term, it is essential to use a stop loss order when scalping. One loss can cancel many profitable trades, so always place a stop loss. The market can make a significant move anytime, so trade safely and minimize losses.
Understanding market news
One of the major attractions of 1-minute chart scalping is you do not need to hold long-term positions and can avoid economic announcements. Trading around news events can be profitable for highly skilled traders, but it is best to avoid scalping on news events for most traders. A news event can cause a huge and quick market move and a wider spread, so it can be difficult to trade a scalping strategy.
Follow the market
A 1-minute scalping is easier when you follow the market`s momentum. A simple rule which can improve your performance is to buy on an up bar and sell on a down bar. Trading against the market`s flow will make your stop loss more likely to be hit before your target.
Use technical indicators
Technical indicators can help structure your trading and find profitable trades. Moving averages, Bollinger Bands, and RSI can help you identify trends and price movements. It is better to focus on using one indicator as it will help you make quick decisions. While a complicated approach can be attractive, reducing the number of indicators rarely improves performance.
Limit your trading hours
The advantage of 1-minute chart scalping is you only need to trade for a short time. Choose a 1 to a 2-hour window when the market volatility is high and become an expert at trading that time. The more you trade at the same time, the more you will get to understand market patterns. Also, building a trading routine to focus 100% on the market and avoid distractions will be easier.
Control your emotions
Scalping requires quick decision-making and can be stressful. It is easy to get excited after many profitable trades in a row and lose your focus. Make sure you manage your emotions and stay as calm as possible. If you feel yourself getting too excited or depressed, then you must stop trading immediately. Taking a short break of 5 minutes can help you reset your mind and increase your chances of making a profit on your next trade.
1-minute chart scalping requires practice to become profitable, but it is well worth the effort for many traders. Achieving profits over a short period reduces the time needed to watch the market and can reduce stress when trading. Ensure you practice on a demo or small account first and then increase your position size as your skills and profits grow.