Scalping Strategy – The Spike Scalping System
This is a very simple scalping strategy, but at the same time does require quiet a bit of trading experience. It is scalping spikes. This strategy falls also under Price Action as there are no indicators’ involved. In this strategy Money management Rules are important, and this is the reason why many experienced traders with a strong understanding of support and resistance should trade this strategy. The Spike scalping strategy is a system that looks at pervious resistance and support areas, and waits for price to move back to these areas. Once prices reach the previous support or resistance, wait for the current candlestick to form a long spike but return to it’s starting point. Once the candle closes you can scalp 6-15 points in the opposite directions of the spike, with your stoploss above or below the spike. The Body of the candle must be smaller than the spike.
Here is a spread betting example to show this strategy:
In this Scalping Strategy there was a previous resistance point at #1. This was a strong resistance. A Spread Better will wait for prices to test this level again. In fact at point 2 prices re-test the previous resistance but fail to break this level. Your entry would be at the close of the candle with your stoploss above the high of the candlestick with the large spike. In this case the spike was 25 points you would look for a 10 to 15 point profit. For those that would like to run their trades, they could do this, no longer being this a scalping strategy. The above scalping strategy is shown on a 15 min chart, to avoid Noise or fake support and resistances. In the case above, a spread better would look to enter a scalping strategy short.
Below is a scalping strategy on a 5 minute chart. As you can see only when there has been a previous resistance or support level and the following candle that tests this level forms a big spike we enter a spread betting trade long or short. Looking to make 10-15 point out of the market.
As you can see from the spread betting example below, the circled candles have small bodies, big spikes in correspondence with previous support and resistance levels.
