[00:02] step what the best scalping trading strategy is. strategy allowed me to go from not making any money to being profitable scalpers. It's
[00:15] a trading strategy that uses three indicators, making it so automated that you don't need to be overly emotionally involved. It can be applied to any asset, and it uses
[00:30] a 5-minute timeframe. This has two advantages: first, we're not trading on the most volatile or the calmest timeframes—it's an intermediate point. Second, we won't be
[00:44] constantly changing timeframes. These points are precisely what make this the best strategy for scalping and making money. So, next, we'll define these three indicators, then I'll
[01:00] explain the rules of the strategy, and finally, I'll reveal five details that will finally, I'll reveal five details that will increase your increase your chances of success by up to 70%. With this
[01:19] general types of indicators: trend indicators, volume indicators, momentum indicators, and volatility indicators. In this trading strategy, we'll not only use three different indicators but also
[01:33] one indicator from each of these categories, except for the volatility indicator.  In the volume indicator category, as a momentum indicator, we will add the RSI, an indicator that signals when the price has extended into an uptrend or
[01:48] when it has extended into a downtrend. It does this by oscillating between two very specific spaces: an oversold period and an overbought period. Remember that these oversold and overbought signals do not
[02:03] price direction, and although, like any indicator, the RSI is not 100% reliable, it generally indicates that the trend is beginning to lose momentum and that a change in it may occur. For the RSI, we will change from the
[02:20] standard 14-period to a 3-period period. Furthermore, we will not follow the pre-established parameters for overbought and oversold, that is, 70 and 30 respectively. Instead, we will use an
[02:34] RSI reading of 80 for overbought and a reading of 20 for oversold. As a volatility indicator, we will use the ADX. It is evident that the market has
[02:46] phases of higher and lower volatility, but we are  Speaking of a trading strategy that's as automated as possible, this indicator will tell us when there's more volatility and
[03:00] when there's less volatility when we add the ADX. Our goal is to observe the direction of market movement. When there's a sharp increase in volatility, the ADX gives you a reading that
[03:14] generally varies between 0 and 50. The higher the reading, the stronger the trend, and the lower the reading, the weaker the trend. The standard setting is always 14 periods, but I've modified it to
[03:31] align with this scalping strategy. So I changed the ADX parameters from 14 to 5, and although many traders use 25 as a key level for the ADX, I prefer the 30 level, which considerably reduces noise and false
[03:47] signals. Finally, as a trend indicator, we'll use the trend indicator, we'll use the 50-period exponential moving average. Remember that we're going to use a 5-minute chart. In this case, we'll use the
[04:01] moving average simply to quickly and visually see when the market is in a clear trend.  An upward trend and when the market is in a clear downward trend: if a market is in an upward trend, the price will remain
[04:14] above this moving average; conversely, if it is in a downward trend, it will remain below the moving average itself. Furthermore, the further the price moves away from the average, the stronger the current trend, and the longer
[04:29] the price remains on one side of the moving average, the stronger the trend. In summary, and before we begin defining the steps of this trading strategy, we will use three indicators:
[04:43] use three indicators: the RSI to detect momentum, the ADX the RSI to detect momentum, the ADX to determine volatility, and the exponential moving average to find the trend direction.
[04:56] We will also use the like button to indicate that we are enjoying the video, the subscribe button to join this channel, and the comments button to explain whether we are enjoying the video and what type of content we would like to see
[05:09] first pinned comment and in the description of this video, you will find other links of interest such as courses, tutorials, training, and other profitable trading strategies—all 100% free content.  Continue
[05:23] your training as a trader without needing to invest your money. Step number one: we have to identify the trend. So in this case, we are seeing an upward trend since the price is above the 50 exponential moving average, and
[05:38] we will be looking for buys. Ideally, if the moving average is sloping upwards, even better. Step number two: we are going to find the moment. So the three-period RSI has to pull back to
[05:54] pull back to oversold conditions and touch the 20 level. Step number three: we look at the ADX, which has to be above the 30 level at the moment all this is happening. Step number four:
[06:08] that the price within this environment has also contacted a support zone or, on the contrary, is forming some kind of reversal pattern. And in this case, as you can see, we have a fairly clear horizontal line. Also, the
[06:24] structure is impulse and pull, and a kind of wedge pattern is forming. Step number five: when all the conditions have been met, we enter at the high of the first green candle, the
[06:38] candle that takes the RSI out of oversold conditions. We execute the market buy.  We place the stop loss below this green candle and aim for a
[06:50] this green candle and aim for a risk-reward ratio of 1:1 or 1.5: 1. In this case, the price is below the 50-period exponential moving average, so we'll be looking for short positions. As
[07:03] before, the steeper the moving average is (in this case, downwards), the better. We have to wait for the three-period RSI to rise into
[07:16] overbought conditions and touch the 80 level or higher. Again, we look at the ADX, which should be above the 30 level when this signal occurs. We look for a resistance zone or a bearish reversal pattern
[07:32] to increase the probability of success. In this case, we see a very clear zone that the price has already touched, and finally, we enter at the low of the first red candle, the candle that takes the RSI out of
[07:47] overbought conditions. This exact candle here, despite being very small, is the one that gives us that entry condition. We'll place the stop loss above the leaf candle itself, and the take profit...  Similarly, as
[08:02] before, with a risk- reward ratio of 1 to 1.51, or for more experienced traders, it can even reach 2. Next, I'm going to explain five different details that aren't rules of the strategy itself,
[08:17] but if you follow them strictly and take them into account when executing trades, you'll increase the probability of success by up to 70% using this trading strategy. The
[08:32] first point is that if the candle that gives you the entry signal isn't a strong, decisive candle that moves in the direction of the trade, it's best to dismiss the signal. For example, when the RSI is oversold and a bullish green candle appears,
[08:49] taking the RSI out of oversold territory, as we discussed before, if it's not a strong candle that moves in the direction of the trade—a bullish candle—it's best to discard it. The same would happen with a
[09:04] bearish candle. For example, regarding a bearish signal, notice how the price is clearly below the 50-period moving average. The RSI rises to the level... The RSI rises to the level... The RSI is stipulated at 80 and the ADX
[09:18] is also above 30. In other words, we have all the ingredients to go short. However, this candle forms—the signal candle that the RSI indicates is overbought. But notice what kind of candle it is: it's a
[09:35] weak candle, not a reversal candle, not a clearly bearish candle. When a candle of this type forms, it's best to discard the candle of this type forms, it's best to discard the trade, as you can see from how it ended up being
[09:47] a clear loss. Secondly, never trade when the price breaks the 50-period exponential moving average several times in a short period. You want a sloping trending moving average. And when the price moves above and
[10:01] below the moving average constantly, it's generally because it indicates a range or consolidation signal. Thirdly, always trade from Thirdly, always trade from support or resistance zones. 98% of
[10:15] traders fail because they don't take different elements into account. They don't consider price action or they only use one of those elements. For example, they trade reversal patterns, candlestick patterns, or price crossovers.
[10:31] Moving averages exhibit divergences with MACD or many others, etc., etc. The issue isn't trading one thing or another; the issue is only considering one element, only considering the pattern, only the candlestick, only the
[10:45] moving averages, only that specific indicator. That 's the worst thing that can happen. And in this very specific indicators, we also add elements based on price action, such as support or resistance. Only follow
[11:01] the signals that form in the most volatile trading sessions, that is, the London or New York sessions. Then there are other sessions like Sydney or Tokyo, which aren't necessarily bad for trading, but
[11:15] bad for trading, but if we can choose, it's much better to use the sessions where there are more traders, which means more volatility and more liquidity. In other words, it's much easier to trade than in other
[11:28] sessions that are much less volatile. Point number five: Pay attention to the spreads. This is closely related to point number four. The more volatile the sessions, the more liquidity, and the more liquid an asset is, the smaller
[11:42] the spreads will be. So it's very important that both  You trade in these types of sessions because of the volatility and the greater ease of trading, as well as the spreads; we're doing
[11:54] scalping. So, those small extra percentages of dating between the actual entry point and the entry point we set are very important. Remember that below, in the first pinned comment and in the
[12:08] description of this video, you'll find other links of interest, such as courses, tutorials, training, and more profitable trading strategies—all 100% free content so you can continue learning as a trader without having to
[12:21] invest your own money. I'll leave this video here. I hope you liked it and that it was helpful, which is the important thing. If so, like, subscribe, share it with friends and family, and I'll see you in the next video.
[12:33] family, and I'll see you in the next video. Goodbye.