Best 1-Minute Scalping Strategy for New Traders

One-minute scalping is a trading strategy which focuses on small price movements. It appeals to new traders for its potential to generate quick profits within a very short timeframe. To be a successful scalper, you must:

• Recognize the importance of real-time market indicators.
• Implement strict risk management to protect your capital.
• Develop a solid exit strategy to lock in profits and minimize losses.

You should read this article because it provides advice and key insights to help new traders and investors master 1-minute scalping for quick, consistent profits.

I’ll answer the following questions:

• What is scalping in trading?
• What are the top 1-minute scalping strategies?
• How do you identify trends in a 1-minute chart?
• What patterns are good for scalping?
• Which technical indicators are best for scalping?
• How important is risk management in scalping?
• What are the pros and cons of 1-minute scalping?

Let’s get to the content!

What Is Scalping in Trading?

Traders use the scalping approach to profit from small price changes. This strategy entails executing a high number of trades, often within seconds to minutes, to capitalize on minor market movements. The goal is to accumulate small, consistent gains that can add up over time.

Here are the principles of this trading strategy: 

• High Frequency: Scalping requires executing numerous trades throughout a trading session.
• Small Gains: Each trade targets minimal price changes, typically a few pips in foreign exchange (forex) trading.
• Disciplined Exits: A crucial element is exiting trades quickly to lock in profits and limit losses.

Scalping involves a high number of trades executed within a short time frame to capitalize on small price movements. For more in-depth insights into scalping and scalping methods, you can explore this comprehensive guide on scalping.

Top 1-Minute Scalping Strategies

To maximize the effectiveness of 1-minute scalping, traders use specific strategies that align with the rapid pace of this trading style. You can significantly improve your trading performance if you understand and apply these strategies. Traders must have a set plan to maximize rewards while managing risks. 

Trend Following

You can use a chart with 1-minute candlesticks to identify price trends. 

• Look for consistent price movement in one direction.
• Use moving averages to confirm trends.
• Enter trades when the price moves in the trend’s direction.

Technical indicators for trend identification include Simple Moving Average (SMA), Exponential Moving Average (EMA), and Moving Average Convergence Divergence (MACD).

Bullish and Bearish Flags and Pennants

Flags and pennants are patterns that can signal potential market movements, making them useful for scalping. A bullish flag indicates a possible upward movement after a brief consolidation, while a bearish flag suggests a downward movement.

Bullish Flags:

• Look for a sharp upward price movement followed by a brief consolidation.
• Confirm the pattern with increased volume during the initial price spike.
• Enter a buy position once the price breaks above the consolidation range.

Bearish Flags:

• Identify a sharp downward price movement followed by consolidation.
• Look for increased volume during the initial decline.
• Enter a sell position when the price breaks below the consolidation range.

Pennants, unlike flags, have converging trendlines during consolidation, forming a small symmetrical triangle. This formation also signals a continuation of the prior trend, with entries triggered by a breakout from the triangle.

Other Continuation and Reversal Patterns

Scalpers should also recognize other chart patterns that indicate continuation or reversal opportunities:

• Triangles (ascending, descending, symmetrical)
• Wedges (rising, falling)
• Double tops and bottoms
• Head and shoulders patterns

Traders need a robust system to identify the trading patterns described above.

StocksToTrade has the trading indicators, dynamic charts, and stock screening capabilities that traders like me look for in a platform. It also has a selection of add-on alerts services, so you can stay ahead of the curve. It takes a lot of the work out of finding optimal entry and exit points.

Grab your 14-day StocksToTrade trial today — it’s only $7

Best Scalping Indicators for a 1-Minute Scalping Trading Strategy

Technical indicators should be used to make informed scalping decisions. The reason for that is that these tools help traders analyze factors in the market and identify profitable entry and exit points. The right indicators can be the difference between identifying a buying opportunity in an uptrend or avoiding prices defaulting towards a downtrend.

Simple Moving Average (SMA) and Exponential Moving Average (EMA)

The SMA calculates the average price over a set number of periods…

EMA gives more weight to recent prices, making it more responsive to new data. Both can be used to identify trends and potential entry points, with the EMA being particularly useful in fast-moving markets.

Stochastic Oscillator

The stochastic oscillator measures the momentum of price movements. It helps identify overbought or oversold market conditions within 1-minute timeframes, signaling potential reversals.

Relative Strength Index (RSI)

The RSI assesses the strength of price movements on a scale of 0 to 100. In scalping, it helps identify whether an asset is overbought or oversold. A reading above 70 typically indicates overbought conditions, while below 30 suggests oversold conditions.

Bollinger Bands

Bollinger Bands consist of a moving average with two standard deviation lines above and below it. These bands expand and contract based on market volatility, helping scalpers gauge potential price breakouts and set entry points. When the price moves towards the outer bands, it often indicates high volatility and potential reversal points.

MACD (Moving Average Convergence Divergence)

The MACD is a trend-following momentum indicator. It shows the relationship between two moving averages of a security’s price. By identifying crossovers and divergences, the MACD helps scalpers spot trend reversals and momentum shifts within 1-minute timeframes.

Each of the indicators discussed above offers unique information on current market situations, aiding traders in making informed decisions. For a more detailed explanation of these indicators and their application in day trading, check out this article on pivot points for intraday trading.

Risk Management in Scalping

Every person who scalps must employ risk management to protect his or her trading account from significant losses. To do so:

• Set tight stop-loss orders to limit potential losses.
• Manage leverage carefully to avoid excessive risk exposure.
• Keep an eye on trade sizes and adjust based on account performance.
• The psychological aspects of scalping cannot be overstated. Traders must remain focused and avoid emotional reactions to market fluctuations.

All traders, especially beginners, need to know the techniques, tips, and tricks for mastering risk management. Learn all of them in my video…

Pros and Cons of 1-Minute Scalping

1-minute scalping offers several advantages and disadvantages in the implementation of a scalping approach. Understanding these can help you decide if this trading strategy aligns with your goals and risk tolerance.

There are three major advantages and disadvantages to 1-minute scalping:

Advantages

• Potential for frequent profits due to the high number of trades.
• Limited exposure to overnight market risk.
• Quick realization of gains which allows for flexible trading sessions.

Disadvantages

• High transaction fees due to the volume of trades.
• Scalping can be intense and stressful, requiring constant attention and quick decisions to prevent unwanted outcomes.
• Potential for significant losses if not managed properly.

Key Takeaways

• Scalping focuses on profiting from small price changes with high-frequency trades.
• Traders must learn how to follow trends, recognize patterns, and use technical indicators.
• Risk management and psychological discipline are crucial for success.
• The time frame of 1-minute scalping offers both quick profits and significant risks.

There are a ton of ways to build day trading careers… But all of them start with the basics.

Before you even think about becoming profitable, you’ll need to build a solid foundation. That’s what I help my students do every day: scanning the market, outlining trading plans, giving ideas and recommendations, and answering any questions that come up.

You can check out the NO-COST webinar here for a closer look at how profitable traders go about preparing for the trading day!

What tools  do you use when you trade? Write “I won’t trade without a plan” in the comments if you’re ready to trade the right way!

Frequently Asked Questions

How Do I Choose a Forex Scalping Broker?

When selecting a broker for forex scalping, consider criteria such as execution speed, tight spreads, and platform reliability. Ensure the broker provides the right tools and resources to support high-frequency trading and always read the legal disclaimers for your account.

What Are the Best Forex Pairs for Scalping?

The best forex currency pairs for scalping are typically those with high liquidity and volatility. Recommended pairs include EUR/USD, GBP/USD, USD/JPY, and AUD/USD. These pairs offer ample trading opportunities with narrow spreads and frequent price movements.

What Is the Role of Exponential Moving Averages in Scalping?

Traders can use the Exponential Moving Average (EMA) indicator to identify trends quickly due to its sensitivity to recent price action. The EMA helps traders set parameters for entry and exit points. 

What Are the Drawbacks of Scalping?

Scalping has several drawbacks, including high transaction costs due to the volume of trades and the need for constant monitoring. The intense nature of scalping can be stressful and requires quick decision-making skills. Additionally, returns can be minimal per trade, necessitating a high success rate to achieve significant gains. 

What Parameters Should Be Set for Effective Scalping?

Effective scalping requires setting specific parameters for entry and exit points, risk management, and trade size. Parameters should be based on thorough analysis and backtesting. For instance, using a combination of EMA settings can help identify short-term trends. 

How Does News Affect Scalping?

Company news events can significantly impact scalping by causing rapid price movements. Implementing alerts for major news releases and understanding their potential impact on currencies or stocks can help in making timely scalping decisions. 

What Are the Benefits of Using Moving Averages in Scalping?

The Moving Average (MA) indicator, including simple (SMA) and exponential (EMA), are beneficial in scalping for identifying trends and smoothing out price data. Using a combination of short-term and long-term MAs can provide clearer signals for scalping. 

How Important Is Community and Education for Scalpers?

Participating in different types of trading communities, forums, and social media applications provides valuable insights and shared experiences for traders of different levels. For example, on platforms like Instagram, you’ll often see traders showcasing their indicator setups. Access to educational resources such as courses, webinars, and articles aids in research and improves a trader’s knowledge and skills.  

How Do CFDs Fit into a Scalping Strategy?

Contracts for Difference (CFDs) allow scalpers to trade on the price movements of assets without owning them. This flexibility is advantageous in scalping as it enables traders to go long or short with ease. Trading CFDs on highly liquid assets and understanding the costs associated with CFDs, including spreads and leverage, is important for managing risk.

What Are the Key Differences Between Forex Scalping and Stock Scalping?

Forex scalping and stock scalping differ primarily in market dynamics and trading sessions. Forex markets operate 24 hours, providing more opportunities for scalping at different times. Stocks, however, are traded during specific market hours, such as on the New York Stock Exchange and the London Stock Exchange. Traders must understand the unique characteristics of each market, including liquidity, volatility, and spreads, to tailor their scalping strategies for better results.