Published On Mar 25, 2022
In this video, I will share an easy scalping trading strategy, with the help of which you may get great opportunities of trade. We will try to explain it in very easy way that even the new trader also may understand. Now let us understand today’s topic. Some of you may have a question that what is scalping. If I explain shortly, scalping is a type of trading, in which trader make trades for short time and for short profits but traders do it in multiple times, thus at the end he can make a good profit. Different traders select different time frames according to their suitability. Here the time frame should be 1 minute to 5 minutes.
In our strategy, we will use 2 indicators. The name of our first indicator is Bollinger band. Bollinger band is an indicator based on moving average, and There are three lines in Bollinger band. the middle line is simple moving average, the line above of the middle line is called upper band and the line below of the middle line is called lower band. these both upper band and lower band are the standard deviation of the simple moving average. The default setting of Bollinger band is 20 and 2. It means the value of simple moving average is 20 period and upper band and lower band are the 2-standard deviation of simple moving average
Our second indicator is RSI, the full form of RSI is relative strength index. RSI is a price momentum indicator; it keeps oscillating between the 0 and 100 value. Remember my friends, RSI cannot go above the 100 level and it cannot go below the 0 level. default setting for RSI is 14 day, and default setting for RSI level is 70 and 30. generally, when the RSI is above the 70 level, it is called that the stock is overbought. Similarly, when RSI goes below the 30 level, it is called that the stock is oversold. In our strategy, we will use this oversold and overbought concept but we will change the default setting of RSI. Instead of 14 period we will take 7 period RSI. Similarly, we will set our overbought level as 80 instead of 70 and we will also set our oversold level as 20 instead of 30. Thus, we will use the combination of Bollinger band and RSI for perfect entry and exit
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