A Simple Scalping Strategy
Many traders love scalping as their main trading strategy. The reason is simple. As a scalper, you are done in just a few minutes when you enter and exit the market quickly making fast profits each time.
There are many scalping strategies. This simple scalping strategy is known as the Lucky Spike and it is being used by many traders to make consistent profits each and every day scalping the forex market.
Always follow the K.I.S.S principle in your trading. The simpler your trading strategy, the higher the chances are for you to make one winning trade after another.
Lucky Spike Strategy uses candlestick patterns like the shooting star, morning star, hammer, the hanging man or the doji as the trigger for entering into a trade.
All these candlestick patterns are similar in the sense that they have small bodies and long shadows or wicks. These type of candlestick patterns are also known as indecision patterns as when they appear it means neither the sellers nor the buyers are dominating the market.
Lucky Spike Strategy can be used on smaller timeframes as well as on the daily, weekly or even on monthly charts. You will be trading only one candlestick in this strategy. First determine that the market is in a strong uptrend or a downtrend. You can use the Heiken Ashi Indicator to find out whether the market is in a strong uptrend or a downtrend.
Now, in a strongly trending market, a Lucky Spike Pattern can be anyone of the above candlestick patterns like the Shooting Star, Morning Star, Hammer, Inverted Hammer, Hanging Man or the Doji with a very small candle body and one shadow longer than the other. When this pattern appear in a strongly trending market, it is a signal for a quick trend reversal. Instead of trading trend reversals, we will be only trading one candlestick. When you spot such a pattern, get ready for a quick trade.
In a strong downtrend when this pattern appears, enter at the open of the next candle with a stop loss placed just below the Lucky Spike Lower Shadow. Take profit on the close of the next candle that appeared after the Lucky Spike Candle.
Similarly, when you find the Lucky Spike appearing in an up trending market, enter into a short trade at the open of the next candle. Place the stop loss on the high of the Lucky Spike and take profit on the close of the next candle!
Article Source: FxTradingStock.com
About the Author
Mr. Ahmad Hassam has done Masters from Harvard University. Learn this powerful Fibonacci Retracement method FREE that pulls 500+ pips per trade. Master these profitable Forex Patterns With The FREE Magic Forex Candlesticks And Magic Forex Divergence.
by: Ahmad Hassam
Total views: 25
Word Count: 433
Date: Mon, 29 Nov 2010
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