Simple 1 Minute Scalping Strategy To Make $300/Day (Backtesting REAL Results)

Summary

This video outlines a one-minute scalping strategy for traders with limited time, focusing on the first two hours of the market day. It details a method using the 5-minute opening candle's high and low to identify four potential trading scenarios on the one-minute chart. The strategy emphasizes quality over quantity, aiming for a 2R multiple on each trade, and demonstrates a week-long backtest on SPY, showcasing an 80% win rate and emphasizing the importance of risk management for trading success.

Takeaways

• 📉 This video explains a one-minute scalping strategy for trading the first two hours of the day.
• 🕔 The strategy focuses on using the 5-minute opening candle to gather information for scalping on the 1-minute chart.
• 📈 The strategy involves identifying the high and low of the first 5-minute candle and using four different scenarios for entering trades.
• ⚖️ The four scenarios include two bullish setups (holding the 5-minute low or breaking and retesting the 5-minute high) and two bearish setups (breaking and retesting the 5-minute low or rejecting the 5-minute high).
• 🕵️‍♂️ The strategy emphasizes the importance of understanding price action and candlestick patterns.
• 📊 The average risk-reward ratio aimed for is 2:1, and the strategy can be adapted to higher time frames like 2-minute or 5-minute charts.
• 🔍 The video demonstrates the strategy through backtesting over a one-week period, focusing on one trade per day.
• 📉 The backtest showed an 80% win rate over five trading days, highlighting the importance of quality over quantity in trading.
• 💡 The strategy uses strong price action signals and key levels to filter out subpar trades, ensuring only high-quality trades are taken.
• 💰 The backtest results showed a total profit of $2,620 for the week, emphasizing effective risk management and the significance of a high R multiple.

Q & A

What is the main purpose of the one-minute scalping strategy discussed in the video?

The one-minute scalping strategy is designed to allow traders to only trade for the first 2 hours of the day, freeing up the rest of the day for other commitments. It is based on the 5-minute opening candle and aims to provide profitable trades without the need to constantly monitor the markets.

Why is the 5-minute opening candle significant in this trading strategy?

The 5-minute opening candle is significant because it provides a lot of information about the market's direction for the next minute. By analyzing this candle, traders can identify the high and low points and use them to set up trades for the rest of the day.

What are the four scenarios for entering a trade based on the 5-minute opening range?

The four scenarios are: 1) A move down to the 5-minute low and holding that level for a potential upside move. 2) A move above the 5-minute opening high and then retesting the high for a continuation to the upside. 3) A retest of the high of the day or 5-minute high for a move to the downside. 4) A break below the 5-minute low and then a retest for a move to the downside.

How does understanding price action improve the effectiveness of this trading strategy?

Understanding price action is key to this strategy because it allows traders to read the market's behavior and make more informed decisions about when to enter or exit a trade. It helps in identifying strong price action signals that confirm a trade setup, increasing the likelihood of a successful trade.

What is the recommended risk-reward ratio for this scalping strategy?

The recommended risk-reward ratio for this strategy is at least a 2R multiple, meaning for every dollar risked, the trader aims to make two dollars in profit. This helps ensure that even if some trades are lost, the overall profitability can still be maintained.

Why is it important to wait for a strong price action signal before entering a trade?

Waiting for a strong price action signal is important because it confirms the trade setup and increases the probability of a successful trade. Without a strong signal, entering a trade may lead to false breakouts or fakeouts, resulting in unnecessary losses.

What does the term 'displacement' refer to in the context of this trading strategy?

In this strategy, 'displacement' refers to the move from the key breakout level all the way down before the retest back into the zone. It indicates that the market has moved significantly in one direction, and traders look for a retest of this level for potential entries.

How does the strategy handle news events that cause sudden price movements?

The strategy acknowledges that news events can cause rapid price movements that may not allow traders to exit their positions quickly. In such cases, the video suggests not counting these as profit targets, as they are not realistically tradable due to the speed of the event.

Outlines

00:00

🕒 One-Minute Scalping Strategy for Time-Efficient Trading

This paragraph introduces a one-minute scalping strategy designed for traders with limited time due to other commitments. The strategy focuses on trading within the first two hours of the market day, using the 5-minute opening candle to identify potential entry points for trades. The speaker emphasizes the importance of trading for freedom of time, and outlines four scenarios based on the opening range that can be used to enter trades without bias. The strategy is explained with an emphasis on quick, intraday trades that capitalize on price action within the first part of the trading day.

05:01

📊 Analyzing Price Action for Scalping Opportunities

The speaker continues to describe the scalping strategy, focusing on how to analyze the 5-minute opening candle on a 1-minute time frame to identify a range of potential trades. They discuss the importance of observing the price action within this range to determine the high and low points that will guide the entry points for trades.

Keywords

💡Scalping Strategy

A scalping strategy in trading refers to a method where profits are sought through small price movements over a short time frame. In the video, the speaker discusses a one-minute scalping strategy that allows trading only during the first two hours of the market day, emphasizing efficiency and time freedom as key benefits.

💡5-Minute Opening Candle

The 5-Minute Opening Candle is a term used in technical analysis to describe the first candlestick formed by the price action at the beginning of a trading session, in this case, over a 5-minute interval. The video script uses this concept to identify the high and low range for the day's trading decisions.

💡Price Action

Price action is the movement of price over time, reflecting the collective sentiment of all market participants. In the script, the speaker uses price action to determine entry and exit points for trades, highlighting its importance in the strategy discussed.

💡Risk-Reward Ratio

The risk-reward ratio is a fundamental concept in trading that compares the potential risk of a trade to its potential reward. The video emphasizes the importance of aiming for a 2R multiple or higher, meaning for every unit of risk, the potential reward should be at least two times greater.

💡Displacement

In the context of the video, displacement refers to the movement of the price from a key level before a retest occurs. It is used to assess the strength of a breakout and to determine if a trade setup is valid.

💡Intraday Trading

Intraday trading is the practice of buying and selling financial instruments within the same trading day. The video's strategy is based on intraday price movements, specifically focusing on the first two hours of the market open.

💡Trade Frequency

Trade frequency refers to how often a trader enters into trades. The script mentions that understanding trade frequency is crucial and that the presented strategy may be suitable for those looking to trade daily.

💡Stop Loss

A stop loss is an order placed with a broker to sell a security when it reaches a certain price. In the video, the speaker explains how to set a stop loss for each trade to limit potential losses, which is a critical aspect of risk management.

💡Profit Target

A profit target is the price at which a trader plans to sell a security to lock in profits. The script discusses setting profit targets based on the risk-reward ratio and using key levels from previous days or psychological numbers.

💡Backtesting

Backtesting is the process of evaluating a trading strategy using historical data to see how it would have performed. The speaker backtests the strategy over a one-week period to demonstrate its effectiveness and provide realistic expectations.

💡Quality Trades

Quality trades refer to trades that are entered with a high probability of success based on defined criteria. The video emphasizes taking one to two quality trades per day rather than focusing on the quantity of trades, which aligns with the strategy's focus on precision and selectivity.

Highlights

A one-minute scalping strategy is introduced for traders with limited time to monitor the markets.

The strategy leverages the 5-minute opening candle to inform one-minute trades, allowing for trading within the first 2 hours of the day.

Traders can identify four different scenarios for entry based on the high and low of the first 5-minute candle.

The importance of trade frequency and its impact on daily trading is discussed.

The strategy is applicable for those seeking to trade daily, with potential for more frequent use than other strategies.

A detailed explanation of how to identify entry points using price action and the 5-minute opening range.

The strategy emphasizes the importance of displacement for validating breakout levels.

Risk management is highlighted through the use of a 2R multiple for scalping on the one-minute chart.

The video provides a backtest of the strategy over a one-week period using SPY as an example.

A step-by-step walkthrough of daily trades, including entry and exit points, is demonstrated.

Transcripts

if you're trying to find a profitable

trading strategy but you have work

school or other commitments that you

can't sit in front of the markets all

day to watch the charts in this video

I'm going to explain my one minute

scalping strategy that allows me to only

trade for the first 2 hours of the day

and then enjoy the rest of the day

because at the end of the day the reason

you want to be a full-time Trader is not

to sit in front of the charts all day

but rather you trade for freedom of time

and being able to do whatever you want

whenever you want so with that being

said let's get into the video so what is

the strategy the strategy involves a

5-minute opening candle as we know the

5-minute opening candle gives us a lot

of information on the one minute and the

one minute is where we're going to scalp

from now here we can see the 5 minute

opening candle but if you actually zoom

into the 5-minute opening Candle on the

one minute what do we see here well we

simply see range so this 5-minute candle

though it's bullish on the 1 minute time

frame we can see that there was multiple

candles making up this 5-minute opening

candle because of this what we want to

do is draw out the high and low of the

first 5minute candle and based off of

this we have four different scenarios

that we could enter the stock from this

allows us to not go into the day with a

bias but simply understand how to enter

the trade based off of the intraday

price action and just have quick scalps

to be done the day within the first 2

hours now the four scenarios we have

within the 5minute opening range is

simple for the two bullish scenarios we

see here it is simply moving down to the

5minute low and then holding holding

that level for a move potentially to the

upside and then number two for the

bullish side is a move above the 5

minute opening high and then R testing

the high because that's the lowest risk

entry for a move to high a bay and

continuation vice versa for the be side

we have the retest of that high of day

or 5 minute high for a move to the

downside or a break below the 5- minute

low and then a retest for a move of

course to the downside so every single

day there's four scenarios that could

potentially play out therefore if you're

someone that needs to take a trade a day

we talked about trade frequency in my

last video If you haven't watched it

it's such an important video however if

you guys understand trade frequency if

you're someone that wants to trade daily

this strategy may be for you I have

other strategy videos on my channel of

course however this strategy is probably

something that you can use more often

than the other ones just because every

day you will get the 5- minute high and

low and most likely if the stock isn't

consolidating you will get a break to

either side that you can play one of

these potential four scenarios out now

when we keep moving here this is simply

what we're looking for as you can see

here we had the break on the 5 minutes

see an impulsive candle strong

displacement a retest with a strong

price action candle our stop loss is a

close right below that 1 minute candle

and our profit Target here will simply

be high of day which is a 2.52 risk

toward trade now a couple things you

have to understand about this strategy

number one the average risk reward we're

looking for is simply a 2R multip if

you're scalping on the one minute chart

however for some people they want to go

on the higher time frame and that's

completely fine as well if you want to

trade this on the 2-minute the 5 minute

even the 10minute all you have to do is

just go higher in time frames for

example if you want to trade the

2-minute opening range you may want to

Mark out the first 10minute candle and

then look for the retest of that however

for me what works the best for scalping

is the 1 minute time frame because the

most precision and the highest reward is

going to be on the one minute time frame

if you can Master volatility now with

this being said as long as you

understand price action which I have a

full in-depth guide explaining how to

read price action and candlesticks as

long as you understand that concept this

strategy is extremely effective now in

this video what I'm going to do is back

test this exact strategy that I just

explained to you guys over a onewe

period on spy and based off that onewe

continuous back testing all we're going

to do is look for one trade a day we're

going to trade from 9 :0 a.m. eastern

time to 11 a.m. eastern time and the

purpose of this video is to give you

multiple examples so you can come back

to this video at any time in the future

and rewatch The examples to see exactly

how I enter the trade compared to how

you may have entered your trade and also

to give you realistic results over a

onewe time frame I'm going to do it

continuously and therefore you're going

to be able to see the results over a one

we period rather than me going and

looking at hindsight or cherry-picked

examples so with that being said let's

get into the the example all right so

here we can see we are opening up on

Thursday on spy and I'm going to do this

over a 1e period therefore I'm going to

do it till Wednesday now of course for

back testing results this isn't enough

data so I recommend you go and back test

this yourself as well but I just want to

show you over a onee period if this

strategy is going to be profitable or

not so the first thing we have to do on

the first 5 minute candle here is simply

Mark out the high and the low of the

first 5 minute candle now we go to the 1

minute time frame and on the 1 minute

time frame you can see of course we have

a little bit more data here we can see

this candle came up strong we had an

impulsive move to the upside we then

rejected this high and now we're coming

back down so of course the 1 minute

gives you a little bit more data that

you weren't able to see on that one

5minute candle and now what we're simply

waiting for is what we talked about

earlier number one is either a hold of

this level and a push to the upside

number two is either a break of The

Upside and a retest for a move once

again to the upside or or we're looking

for a break and retest of the downside

or a rejection of that 5-minute high for

a move to the downside so those are the

four scenarios that we're looking at for

this specific trade now let's play out

the trade and see exactly what

happens so one thing I want you guys to

notice here as well is as we moved up

here we broke the level but then we came

back and we Consolidated so this break

right here doesn't show enough

displacement what displacement means is

it's simply the move from the key break

of the level all the way down before we

get the retest back into our Zone and we

need displacement to of course enter the

trade with this level here we can see we

broke and then this candle pushed right

back up above our level therefore this

level so far has been invalidated for a

move to the downside this is where

understanding price action is key but so

far we have not entered into this trade

because we haven't gotten any bullish or

bearish signals near our key

levels as we can see here we're simply

just consolidating so far we haven't

created a clear Trend and the reason I

can't take this for a potential move to

the upside is because we have actually

broken that level and then moved back up

and therefore so far this is simply a

choppy day and now what I would be

waiting for the only way I would play

this day is if we broke the 52421 level

for a retest or if we broke the 525

level up here for the

retest here now we see this displacement

what we see here is displacement what

this refers to is an impulsive move

after the breakout this means that now

sellers are in control and therefore we

are now looking for a retest of this

previous 5 minute low so let's keep

playing out this

trade and as we can see right here what

we're getting is that rejection of the

trade we can see we pushed back up into

that 5minute opening range and we're

getting a bearish inverted Hammer candle

we also see that the green candle was

not able to close above the 5-minute low

and therefore we can enter into this

trade here now we would enter into a

short position and this trade is fairly

simple our stop loss can simply be a

break of this green candle right here

because once again if we go back into

this 5minute opening range this means

most likely we're going to consolidate

how we did back here and our profit

Target here can simply be low of day now

this is a

3.79 our multiple trade we enter into a

short position here and let's see

exactly what happens

and we made a very nice move to the

downside now this was a

$325 day on Thursday I'm going to back

test until Wednesday and at the end of

the video I'll show you the results for

the full week the total p&l the amount

we risked and the amount we actually

profited so make sure to stick to the

end but with this being said let's go

over to the next day on Friday all right

here we are on Friday I marked out the

opening High and the opening low for the

first 5-minute candle and now all we're

waiting for is the four potential

scenarios to set up so let's play out

this

trade and as we can see we got a very

strong move to the upside right at the

beginning of the day now what we're

waiting for is the retest the retest

opportunity is down here and then a push

to the upside so let's see if we can get

that potential

move now here's a scenario where the

trade does not occur the reason this is

is because when we push back in here

this candle right here had no strong

price action if this candle closed like

the candle down here then of course we

would be able to enter Because this

candle shows that sellers made the stock

go all the way down but buyers brought

it all the way back up and closed it

with the strong Hammer candle

unfortunately with this candle we can

see that buyers did try to bring it up

but then sellers came all the way at the

top and closed it below our specific key

level and because of this we can't enter

into this trade based off of the weak

price action and we still need to wait

for a potential trade to set up so you

can see with the stry you only enter A+

trades and it allows you to not enter

into these subpar trades because of the

price action that's presented near these

key levels so let's keep playing out

this

trade so we had the move initially and

now we have the displacement so now

after we did break to the upside but

most buyers got faked out to the

downside if we do retest this low with

the weak price action candle this would

be a perfect entry for a short position

so let's play out this

trade and as we can see here we came up

and we actually retested this level

right here and then we put in a weak

price action candle so how would I enter

into this trade specifically well I

would be looking for a short position

here and my stop- loss in this specific

trade would be this impulsive candle

that tried to break this level therefore

my stop loss would be up here and for my

profit Target because low of day is so

close we would have to look at previous

day levels or even psychological numbers

now in this example here we can see that

the pre previous day low actually occurs

right here at

52134 this is the previous day low and

therefore this can be used as a profit

Target for this specific trade so if we

were to enter into this trade here our

profit Target would be all the way down

here with our stop loss of course being

at the close of this impulsive candle

High because once again if we come back

into that level we could potentially

just have range or move to the upside so

this is a 3.49 R trade once again we

enter into a short position and let's

play out this

trade this was a solid trade all the way

down to those lows and this was a

$1,090 trade so this was Friday in this

example we were able to see how we only

enter A+ trades now let's go over to

Monday to continue our week here we are

on Monday I marked out the high and low

of the first 5minute opening range now

let's play out this trade and see

exactly what happens so as we can see in

the beginning of the day we were just

consolidating in between 5291 16s and

528 61s now we can see a strong move to

the downside with a strong displacement

so all we're simply looking for is the

retest of this displacement and then the

rejection of that low so let's play out

this trade and see if we can get that

retest now here's an interesting

scenario now this was a 10:00 news pop

however after the news pop you can see

that the news had the rejection of 5291

16s and then we continue to reject on

the next candle with a very weak candle

so how would I potentially play this

trade out I would look to enter into a

short position here my stop loss would

simply be a break Above This 101 candle

and the reason being for that is because

once again we come right back into range

if we do break back into that 528 61

level and of course as we talked about

earlier we need at least a 2 R multiple

now within that two our multiple what I

can see is this

526 level based off of this 526 level

right here this would give us around a

2.04 r trade and therefore because I

trade at least a 2 R multiple that's my

average risk to reward I can enter into

this trade so let's enter into a short

position here now some people are going

to ask why 526 this is a whole

psychological number if you haven't

watched my other videos it's very

crucial that you go watch those as well

just to understand more things about

price action Market structure and

exactly how I'm entering and exiting

this trade but you just need to

understand that this is a whole

psychological number and this is where

institutions mainly buy or sell at

because it is a whole number now let's

play out this trade so far as we can see

we are simply just

consolidating and there we go there's

that 526 level we can see that was

$950 on the day with a

2.04 r trade so so that's Monday so far

we've done 3 days we have two more days

left so let's go over to Tuesday once

again now we're on Tuesday I marked out

the first 5 minute opening high and low

let's play out this

trade and as we can see here this is a

different trade than we've taken so far

however what we're getting here is a

rejection into the open a move down and

then a rejection once again off 52677

which is the high of the 5 minute so so

we can look for a potential short

position because this is such a weak and

bearish candle looking for a move down

to 52577 and our stop loss in this case

scenario would simply just be above high

of day in this scenario here we can just

put it at

52690 so this would be a 3.52 risk to

reward trade let's enter into a short

position here and see exactly what

happens

unfortunately as we were making that

move down right we did have an impulsive

candle to the upside and because of this

we did hit our stop loss here and

because we wait for the candle to close

the candle closed right here and this

was a minus

$235 trade now of course with every

strategy this is why I'm doing it over

the onee period this isn't Cherry pictor

hindsight examples but what I want to

show you guys is that every strategy

right you will lose because this isn't

textbook and I'm showing you in the real

Market at what happened literally last

week you see that I lost the $235 but

because of the proper risk management it

wasn't that big of a loss because every

trade is over to or multiple and

therefore what that means is even if we

lose one trade or two trades on the

third trade if we win that we will still

be profitable or break even and

therefore this $235 loss is completely

fine on the Tuesday now let's go over to

Wednesday which is the final day of the

week and then we'll do the final total

profits for the whole week here we are

on Wednesday this is the last day of the

week for us because we started on

Thursday therefore this was one week of

back testing this is once again 5-

minute candles we're looking for those

four potential scenarios to play out for

this week so let's play out this trade

as we can see we're currently breaking

that 5312 level we're going to be

looking for the retest now this retest

here we see that it came back up and we

actually are pushing above the retest

level therefore there's no weak price

action just yet for us to enter in on

now we can see that we did break again

to the downside this time a stronger

displacement making a new low of day

showing low of day continuation and

therefore now we are looking for once

again that retest of 530 12s hopefully

this time we can get a little bit better

price action now in this scenario here

we can see that we're retesting with a

weak price action candle we came back up

and we are printing a we candle that is

closing as a red candle with a clear top

right here so we can enter into a short

position like we talked about before our

stop loss in this scenario would just

simply have to be above this previous

pivot level right here and for our

profit Target if we simply do low of day

that's only a 1.69 R multiple like I

talked about we need at least a two R

multiple so we can actually scroll back

out on the day and as we can see this

previous day high level is what we can

Target because that's a pivot level on

The Daily time frame which holds a lot

of emphasis on the chart we can have

this as our profit Target which would

give us once again a 2.93 r multiple

trade we can enter into a short position

here and let's see exactly how this

trade plays

out now this candle right here was a

news candle at 10:00 and because of how

fast it happened most likely you weren't

going to be able to get out of your

trade and therefore I want to make this

realistic therefore we're not going to

count this as a profit Target because it

did happen so fast that realistically

you weren't going to be able to get out

of that position that fast

however as we can see even with that

news candle we did make a move down now

we can obviously exit out of the trade

and this was a

$490 trade to end off the week now let's

go over and see the results of the week

the total profit the amount we risked

and the risk reward multiple that we had

per trade okay now we're here for the

results of the total week there was only

five trading days for the week of course

and therefore we took one trade a day I

hope you guys noticed that with this

strategy it's more about quality of

trades in quantity for myself I like to

only take one to two quality A+ trades

per day I don't like to push the limit

over that and recently I've only been

taking one trade per day and it's been

working out extremely well and here we

can see we took five trades four of them

won which was an 80% win rate now with

this win rate we have to look at the

results so when we look at the results

these are the five trades that we took

we can see the r multiple so 3.79 3.49

2.04 3.52 and 2.93 what this means is is

for for every dollar that we risked we

would have made

$379 for that trade so if we risk $1

that dollar would have turned into $379

now as you can see for most of these

it's much over that 2 R multiple and if

you average all of these out it would

come out to around a three R multiple

for this specific week but in my

personal opinion as long as your R

multiple is over two that's still

completely fine with this strategy as we

can see on the first day we made $325

then we made $1,090 $950 on the third

day we lost $235 on trade 4 and we won

$490 on trade five one thing I want you

to notice as well notice the loss

compared to all of the wins the loss is

so much smaller because our R multiple

is so high therefore for you as a new

Trader or if you've been trading for a

little while just understand your risk

management and the way you use your R

multiple will take you much further than

trying to get the best win rate and this

is why in my opinion risk management and

your R multiple is key to your trading

success now when we look at the results

for the 5 days that we back tested

because there's five trading days in a

week we made

$2,620 for the week now of course like I

said this is just a onewe back test just

just show you a little bit more

realistic results and examples so you

can come back to this video and rewatch

it however I always recommend try to

back test the strategies yourself to

increase your confidence and conviction

to actually enter and use the setup so

with that being said if this video

helped you make sure to give it a like

if you have any questions put in the

comments down below make sure to follow

me on Instagram and Twitter and I'll see

you guys next week with a brand new

video