Scalping the 1-minute forex chart can yield consistent profits for traders who have the patience, discipline, and right strategy. Focusing on extremely short timeframes allows scalpers to capitalize on tiny movements in currency pairs throughout the trading session. By taking many small trades, each with a preset stop loss and profit target, scalpers can make a high number of profitable trades even if just half are winners.
In this article, we’ll cover a tested 1-minute scalping strategy using a combination of price action techniques and technical indicators. With the right approach, 1-minute scalping can be a highly lucrative—though demanding—approach to forex trading.
Let’s discuss the keys to a successful 1-minute scalping strategy.
The Basics of 1-Minute Forex Scalping
Forex scalping involves trading very short timeframes. Scalpers focus on 1 minute and lower charts, holding winning trades from just a few seconds to a few minutes. Using small position sizes, that will typically range from 0.01 to 0.1 standard lots to manage risk. Setting tight stop losses and targets. Stops are placed just a few pips away, while targets aim for 5 to 20 pips to secure a reward/risk ratio of at least 1:1. Also Chasing many trades. Scalpers must take numerous positions throughout the day to achieve consistent profits.
Here’s a basic strategy for 1-minute forex scalping:
1. Select highly liquid pairs like EUR/USD, GBP/USD, and USD/JPY and avoid less liquid exotics.
2. Watch for breakouts of key support and resistance levels on the 1-minute chart, entering as the price action confirms the break.
3. Place a stop loss 8 to 15 pips away and an initial profit target of 10 to 20 pips.
4. If the trade moves in your favor, trail the stop loss to breakeven and raise the profit target.
5. Target 5 to 15 scalps per day. This requires intense focus and patience.
6. Use only 0.01 to 0.05 standard lots per trade to manage risk.
That covers the essentials, but there are techniques you can incorporate to improve the strategy. Let’s discuss how to optimize this approach.
Optimizing the 1 Minute Scalping Strategy
There are several ways to refine the basic 1-minute forex scalping strategy:
Incorporate MACD: Use the MACD indicator to spot potential reversal points and time entries within current trends. Look for MACD divergences on the 1-minute chart, signaling an upcoming reversal.
Add RSI: The Relative Strength Index (RSI) on the 1-minute chart can signal oversold or overbought conditions, providing opportunities for mean reversion trades.
Use limit orders: Instead of market entries, place buy limit orders a few pips below support and sell limit orders above resistance. This can improve your average entry price.
Scale in and out: On strong moves, enter partial positions initially and add to them on pullbacks or breakouts. Similarly, scale out of trades by taking partial profit targets.
Focus on key times: Scalp more aggressively around London and New York market opens as well as at major economic news announcements when volatility spikes.
Limit exposure: Don’t take consecutive losing trades. After two losses in a row, take a break and reassess market conditions before scalping again.
Backtest strategies: Test different combinations of indicators, filter rules, and position sizing on historical 1-minute charts to refine your approach.
Automate with an EA: Consider creating an expert advisor to automate your scalping strategy and take some of the stress out of taking numerous trades each day.
Managing Risks on the 1-Minute Chart
Any scalping strategy comes with risks, and these risks are amplified when scalping the 1-minute chart. Slippage and spreads are more impactful at smaller timeframes, and price movements can easily whip against you within a minute. It is crucial to manage these risks by applying the following techniques:
Utilize tight stops to limit the impact against movements. Plan for stops that are 2 to 5 pips from your entry price, equivalent to just a few 1-minute candles. This will minimize drawdowns if the trade moves against you.
Use small position sizes relative to your overall account. Since 1-minute moves can be volatile, limit each trade to 1% to 3% of your total equity. This will confine the impact of any single losing trade.
Consider a scalping risk management ratio of 1:1 or 1:2. Aim for profits that are equal to or double your maximum risk per trade. This will ensure you need only a moderate win rate to be profitable overall.
Look for multiple entries on the same directional move. Don’t take the first signal you see, wait for the price to pull back and retest support/resistance for a higher probability trade. This will increase your chances of a successful scalp.
Utilize a set timeframe to close all positions. Even with a winning trade, set an end time for the scalp, such as 2 to 5 minutes after entry. This will lock in some profits and limit the duration of exposure.
Useful Chart Tools For 1 Minute Scalping
The default chart tools in many trading platforms are poorly equipped for 1-minute scalping. Enhance your setup with the following tools to gain an edge:
- Custom indicators built for small timeframes like MACD, Stochastics, and RSI. Adjust the settings to produce signals during minute-to-minute price action.
- Volume indicators to confirm price spikes, including Volume Profile and Volume Oscillators. Look for surges in volume on breakdowns or breakouts.
- Price Alerts and Push Notifications so you can catch important chart levels even when away from your screen.
- Multiple timeframes are displayed simultaneously. Watch the 5-minute and 15-minute charts alongside the 1-minute to gain macro context.
- A Pip Counter to easily track profit and loss on the fly without doing manual calculations.
A chart customization feature on Allpips allows you to place shapes, channels, and free-drawing trend lines directly on the chart. This helps you identify patterns within 1-minute candles.
Conclusion | 1-Minute Forex Scalping
The keys to success with this approach are discipline, risk management, and resilience through inevitable drawdowns. By combining money management, technical indicators, and a weather eye on market conditions, you give yourself the best chance of seeing consistent profits through 1-minute chart forex scalping.
In conclusion, 1-minute forex scalping is an advanced trading strategy requiring a high tolerance for risk, drawdowns, and constant trading activity. But for traders with the discipline and patience to refine and stick to a tested system, scalping the 1-minute chart can be a fruitful approach capable of generating steady income through hundreds of small profits each month. With enough practice, optimization, and resilience, 1-minute forex scalping could become a source of consistent profits for your trading business.
