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.

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Price Action-1-2-3 Trade system

Price Action–1-2-3 Trade system

This strategy is a very simple and logical strategy used throughout the trading world. The Price Action 123 Spread betting Trade System takes a new trade when prices fail to make new highs or new lows. The Spread betting example below is set on a 4HR chart but this can be used on any time frame. I have also pictured this strategy on the EURUSD. This is my favourite pair and the forex spreadbetting pair I specialize in.

There are no indicators, it is all price action. This is considered a reversal strategy.

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Summary
Time frame: 4HR
Tag: EURUSD
Indicators used : None
Type: Price Action
Timeframe of trade: Swing

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Entry Rules:

Entry occurs after a trend has been underway for sometime, and prices have reached extreme levels. These levels will no longer be sustainable, and prices will fail to make new lows or new highs.

Below is a spread betting example of the Price Action–1-2-3 spread betting system.

Spread-betting short:

This is opposite to the above entry signal; instead prices have reached new highs and fail to move higher, interrupting the up trend.

A) 123 – Lower High
After prices have been making new highs and higher Lows, the new highs are not sustainable anymore and the highs make a lower high (3). Here the bears have overpowered the bulls and it is time to trade short unless you a conservative trader that you wait for prices to bear point (2).

B) 123- Double top.
Similar to the above scenario, you will instead have prices form a double top at the highs, fail to break the highs and move lower. Here is your entry signal, or, again if you are a less aggressive trader wait for the prices to break point 2.

Spread-betting long:

There are two buy scenarios:
A) 123 – Higher Low
This scenario is when prices have been falling making Lower Lows and Lower Highs. At the end of the downtrend the low does not make a new low, but makes a higher low. Now you can spreadbet long when prices fail to make a new low. A less aggressive trader will wait for the prices to move higher past point 2 then he buys.

B) 123- Double Bottom
In this scenario, at the end of the downtrend the low does not make a new low, but makes a double bottom, not breaking into new lows. This is a signal to trade long. A less aggressive trader will wait for the prices to move higher past point 2 then trade long.

Exit Rules:
Exit the trade either at target profit or when the opposite signal occurs, that is when the trend fails to continue and new highs or lows fail. Use your money management rules

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Price Action System-morning break out

Price Action System–morning break out

Forex Spread betting

There are many morning break out strategies you will find on the web. I have fount this one to be the most effective.

Time frame: 30 min
Tag: EURUSD
Indicators used : None
Charts used: EURUSD
Type:Trend Trade
Timeframe of trade: Day trade or Swing

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This strategy is very simple, but an advanced spreadbetting strategy as you do need a some trading experience. Look for the overnight range on EURUSD. The optimal setup is when the rage is under 1/3 of the average range and that the overnight range is either in the upper half or the lower half of the previous day’s range.
The overnight range is considered between 20.00 and 8 am UK Time(when the UK stock market opens). soon after the opening you will have big players come into the market and they will push the price in one or the other direction.

Wait for a break out of the overnight range. When there is a pull back towards the range, enter the trade in the direction of the pull back. Look at the example in Spreadbetting example 1:

In the Price action system above. The overnight range was between 1.3307 and 1.3268 . 39 point’s which is roughly 1/3 of the average range of EURUSD. This range formed near the low of the previous range. In the example above there is not a real pullback into the range but there is a strong pause at 1.3250. This pause is considered a pullback in price action.

Above is another Forex spreadbetting example of the morning break out strategy. In picture above, the price action has a retracement in the morning back to the resistance line that has become support. This is where you enter the trade.
You only trade one trade a day, on the optimal setup. If you are a more aggressive trader you could use a stop and reverse strategy.

Exit Rules:

Your profit target is 2/3 of an average day range or target of one full day’s range if you would like to keep it overnight.
Your stop loss is the middle of the overnight range. If after the breakout the trade falls back into range crossing the middle of the overnight range. There is a greater chance that the trend will be in the opposite direction, to the current breakout. Therefore this is your stoploss are.

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Shooting Star

Bearish Reversal Pattern

What is a Shooting Star?

The shooting star is a bearish reversal candlestick. Most bearish reversal patterns this pattern will

-occur within an uptrend or at the top of a trend
-Often it is followed by a confirmation candle.

Be aware with bullish reversal candlesticks this is a warning sign of a possible change in trend, but it is not a signal. Traders normally look for confirmation of a change of trend on the next candle.

Formation:

A shooting star is created when the opening, closing and low prices on a candlestick are in the same area. The shooting star will have a long upward shadow. Normally the shadow is 2 to 3 times the size of the body. The whole theory behind this is that prices have been moving higher until they reach a high point or a resistance. They try move higher but the sellers come in and push the prices all the way back down to the opening price. This shows the strength in the sellers.

A strong pattern shooting star is formed when the closing price is in line with the opening price or is lower than the opening price.

Shooting stars are often applied in many price action spread betting strategies. Below is a spread betting example of the shooting star.

Here is an example of the shooting star applied in a scalping spread betting strategy on the FTSE.

How to trade the shooting star?

Below is a spread betting example of a shooting star in GSK.L

As you can see in this strategy the prices were moving in an uptrend, until prices reached a new high. At this high, a lot of selling pressure comes into the market that pushes the prices way below the opening price of the candle. The next day is dominated by sellers again that the prices close near their lows on a very strong bearish candle. The Bulls try another attempt but are unable to push higher the following day. The shooting star is the first candle that marks a change in trend.

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