The BEST 5 Minute Scalping Strategy Ever (Simple and Proven)

Summary

In this video, the presenter shares a simple and effective scalping strategy that works every day without relying on indicators. The strategy focuses on using the first 4-hour candle range of the day to find entry points on a 5-minute chart. The system is rule-based and can be combined with other trading techniques for enhanced performance. The video provides real trade examples across various markets like crypto, forex, and gold, demonstrating the strategy's profitability. Despite some losses, the strategy shows a solid win rate, making it a valuable addition to any trader's toolkit.

Takeaways

• 😀 Simple yet effective scalping strategy that works every day without needing indicators or long preparations.
• 😀 The strategy is rule-based and involves following a three-step checklist for entering trades.
• 😀 The core of the strategy relies on the 4-hour range, defined by the high and low of the first 4-hour candle of the day.
• 😀 Step 1: Mark the high and low of the first 4-hour candle using New York time on TradingView.
• 😀 Step 2: On the 5-minute chart, look for price to break out and close outside the 4-hour range, then re-enter within the same day for confirmation.
• 😀 Step 3: Entry is confirmed when price re-enters the range. Stop loss is placed at the breakout point, and take-profit is set to 2x the stop-loss distance.
• 😀 This scalping strategy works on various markets, including crypto, forex, and gold, with real trade examples provided for each.
• 😀 While the strategy itself is profitable, it can also be combined with other systems like price action and trend analysis to boost performance.
• 😀 The strategy's performance in real trading scenarios includes both wins and losses, with transparency on the results shared.
• 😀 Backtesting results show strong profitability with win rates of around 72% on crypto, 83% on forex, and 60% on gold, all achieved using the basic strategy.
• 😀 The strategy is beginner-friendly, requiring only a basic understanding of price action and can be tested further to refine results and performance.

Q & A

What is the core idea behind the scalping strategy shared in the video?

The core idea is using the range of the first 4-hour candle of the day to guide scalping entries on a 5-minute chart. By marking the high and low of the 4-hour range, traders look for breakouts followed by a re-entry into the range for trade opportunities.

How does the strategy work without relying on indicators?

The strategy works by using a simple, rule-based approach where the trader identifies the high and low of the first 4-hour candle, then waits for a breakout on a lower timeframe (like 5 minutes) before entering the trade, without relying on any technical indicators.

What are the key steps in executing the strategy?

The strategy consists of three main steps: 1) Mark the high and low of the first 4-hour candle. 2) Look for breakouts on the 5-minute chart, followed by price re-entering the range. 3) Enter the trade and set stop-loss and take-profit based on the range breakout.

What is the role of the '4-hour range' in the strategy?

The 4-hour range defines the key levels for the day. The high and low of the first 4-hour candle are used to identify potential entry points for scalping, with breakouts and re-entries offering signals for trade setups.

Why is it important to use the New York time zone for the 4-hour range?

The New York time zone is important because the strategy focuses on the first 4-hour candle of the day, and using New York time ensures consistency across different markets, as the first 4-hour candle forms at a set time each day.

How does the strategy handle invalid setups during a breakout?

If a breakout occurs but the candle does not fully close outside the range (only the wick extends), the setup is invalid. A full candle close outside the range is necessary before the setup is considered valid.

What is the recommended risk management technique in the strategy?

The recommended risk management involves setting a stop-loss at the exact high or low of the breakout candle and aiming for a take-profit that is at least twice the size of the stop-loss (2R).

Can this strategy be used with other trading systems or strategies?

Yes, the strategy can be combined with other systems like price action, trend analysis, or your existing strategy to enhance its performance. It's versatile and works as a complement to other methods.

What was the win rate of the strategy in the crypto market during the backtest?

In the crypto market, the strategy achieved a win rate of 72%, with 5 wins and 2 losses across 7 trades, resulting in a total gain of 8R.

How did the strategy perform on the forex and gold markets?

On the forex market (EuroUSD), the strategy had an 83% win rate with 5 wins and 1 loss, earning 9R. On the gold market, it had a 60% win rate, with 6 wins and 4 losses, resulting in an 8R gain.

What were the losses encountered during the backtesting, and how were they handled?

The losses occurred when price didn’t re-enter the range or when the breakout was too large. In these cases, the strategy either avoided further trades or used alternative stop-loss placements (e.g., nearby support/resistance levels) to manage risk. Losses were handled transparently, with the goal of learning from both wins and losses.