Hi everyone and welcome to my homework post for Professor @yohan2on. This is an excellent lecture on Scalp Trading. It is a detailed lecture and I am going to submit my homework.
What is Scalping?
Scalping is simply a trading style in which trader make short trading. It means that short time format is used in this trading style and every trade is closed within very short time, may be in few minutes. Purpose of this trading style is to collect small profits making it possible through very short term trading. Trader tries to take advantage of every short move of the asset. Hence it is called Scalping.
Finger-trap Scalp Trading.
There are many strategies in Scalp Trading. One of these strategies is Finger-trap trading. In this strategy, Exponential Moving Average are used with 5 minutes time frame. 8 EMA and 34 EMA are applied on the candlestick chart.
First of all strongest trend is searched by using H1 time frame. In this strategy while in uptrend, fast moving average line should above the slow moving average and all the candles should be formed above these moving average lines. Whenever a candles crosses the fast moving average and a bullish candlestick is closed above 8 EMA line, the entry can taken on this level and stoploss should be the previous swing low.
Now let me explain how to enter trades in M5 timeframe.
I have circled the points where trades can be entered. And also stoploss has been mentioned in the above screenshot with the help of green line.
In downtrend, fast moving average (8 EMA) is below the slow moving average (34 EMA) and all candlesticks are under these two lines.
You can see that 8 EMA is below the 34 EMA and candlesticks are below these lines almost all the time. Now we will find entries in M5 timeframe.
I have circled the points where trades can be entered with stoploss mentioned with green line in the screenshot. In this way, a trader can make enter the trades in this strategy.
On the M5 timeframe chart, 8 EMA is below 34 EMA and bearish candle has crossed the 8 EMA to the downside, so I entered a short trade and set the stoploss as it can be seen in the screenshot below.
In the below screenshot, I have entered a short trade on the basis of Finger-trap scalp trading. A bearing candlestick has crossed the 8 EMA and I have set Stoploss and Takeprofit as it can be seen in the screenshot below.
There are many short term and long term strategies and short term scalping strategies are not very common as it requires too much skill and knowledge of the market. I have taken entries but I don't know what will be the result. I have tried to explain how it is done following this strategy.