15 Minute Scalping Strategy
The 15-minute scalping strategy on the Stochastic indicator is used by forex traders to try to capture small gains over short time frames. Over time these small gains can add up, and the Stochastic is a popular indicator for reading buy and sell signals.
For this particular strategy, the time frame to use is the 15-minute chart. It can also work as a scalping strategy on the 1-minute and 5-minute time frames. You can use any currency pair you like with the 15-minute scalping setup, which makes the Stochastic a solid indicator for short time frames.
Setting Up the 15-Minute Scalping Chart
It is important to set your charts up correctly to get the best results from the 15-minute scalping strategy. You can choose any trading session you want to use, and the 1-minute, 5-minute and 15-minute charts are recommended.
We will use MetaTrader indicators for this setup. The indicators to use are listed below. Here is what the buy trade setup, or reversal-point strategy, will look like:
- Stochastic with the following parameters: slowing 16.0, %K 26.0, %D 18.0
- The 120-day moving average (shown in purple on the charts) and the 50-day moving average (shown in orange on the charts)
Read also: What is a moving average?
The first green circle marks the entry signal (buy), while the second red circle marks the exit signal.
Now it is time to reveal the 15-minute scalping strategy:
Buy Trading Strategy
Use the chart above to follow along. Only go long when the following two conditions are met:
The clear buy signal is when the fast blue line of the Stochastic crosses the slow red line to the upside from inside the oversold area (below the 20 level on the Stochastic). It should break and stay above the oversold area (above 20). Once this condition is met, you should enter the buy.
Another buy signal is upward pressure. This can be shown by the 50-day simple moving average (the orange line) crossing the 120-day moving average (the purple line) to the upside.
You should place your stop loss about 2 pips below the support level.
The following scenarios are signals that you should sell:
If the blue line of the Stochastic crosses the red line downward from inside the area above the 80.00 level. It should break and stay below the 80.00 level on the Stochastic.
Two short-trade examples are shown here. Circles 1 and 3 are entry signals (sell) and circles 2 and 4 are exit signals.
For a sell trade, you should place the stop loss 2 pips above the resistance.
Read also: Best indicators for scalping
Exit Strategy for 15-Minute Scalping
If any of the following scenarios happen, you should exit the trade or take profit.
When the blue line of the Stochastic crosses the red line from inside the overbought area (exit signal for sell trades) or the oversold area (exit signal for buy trades).
Another signal to exit the trade is if the 50-day moving average (the orange line) crosses the purple 120-day moving average line from bottom to top during a downtrend, or from top to bottom during an uptrend. This is a sign that the current trend is losing strength, and you should take profit and exit the trade at this point.
Finally, the 15-minute scalping method is often used to flag new intraday highs and lows for a given asset. For example, a new intraday high means the asset has reached a new high compared with all other prices during the same trading session.
Traders also pay close attention to intraday price moves by using real-time charts in an attempt to benefit from short-term price swings. Short-term traders usually use 5-, 15-, 30- and 60-minute charts when trading with 15-minute scalping.
The 15-minute scalping method used during the day usually relies on 1-minute and 5-minute charts for high-speed trading, while other intraday strategies may use 30- and 60-minute charts for trades that last several hours.
15-minute scalping is a strategy for handling many trades in a single day that aim to profit from small moves in an asset’s price. An intraday trader may hold positions for longer, but still operates under high risk.
A Simple Forex Strategy
Frequently Asked Questions
What is scalping?
Scalping is a short-term trading style in the forex market that aims to capture as much return as possible from small price moves. It relies on price action and technical indicators.
When does a trader earn the profit?
A trader earns the profit after the capital is preserved; the profit is realized as soon as it appears, which happens only in the case of a gain. In a loss, the capital owner alone bears it.
Is scalping halal or haram?
Speculation on the stock market is halal, according to a fatwa from Egypt’s Dar al-Ifta, provided the business of the company whose shares are traded does not violate the rules of Islamic law.
What are the types of speculation?
Speculation is divided into two types: absolute speculation, in which the trader does not need to consult the capital owner until the speculation contract ends; and restricted speculation, in which the capital owner requires the trader to consult them before executing trades.
How is the loss split in a speculation company?
Speculation is based on a contract between the capital owner and the trader, in which the trader manages the money in exchange for a share of the profit. In a profit, the trader gets a share of the money, while a loss is borne by the capital owner alone.
What is the best indicator for a day trader?
There are many technical indicators that work well for scalping or short-term speculation, since price action alone cannot be relied on because of large price swings, and a strong technical indicator is needed as a support alongside price action. Among the best of these indicators today are the Bollinger Bands and the Relative Strength Index.
How do I identify speculation stocks?
This is done by looking at the share value; small-cap shares are often used for speculation because they can produce larger percentage moves. You can also identify speculation stocks through platforms and sites that provide a news service for the stock and forex markets to help you find the best speculation stocks.
What are the best stocks to invest in?
The best stocks to invest in are those suited to long-term trading and that do not carry high risk. Several sectors suit this type of trading, such as e-commerce and banking.
What are speculation companies?
They are companies that make it possible to enter a contract with a capital owner to speculate on a group of stocks in order to make profits.
What are the blue-chip stocks in the Saudi market?
Blue-chip stocks are shares of large companies known for a good reputation, financial strength and high profit ratios. Saudi blue chips include Malath Cooperative Insurance, Saudi Electricity and Saudi Kayan.
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This article is for educational purposes only and is not investment advice. Trading forex and CFDs on margin carries a high level of risk to your capital because of leverage, and you can lose more than your initial deposit. Signals from indicators such as the Stochastic can fail, and past performance does not guarantee future results. Some links on this site may be affiliate links, and we may earn a commission at no extra cost to you.
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