Simple Scalping Strategy Called Lucky Spike!

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Published: 03rd December 2010
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Scalping is a widely used trading strategy that works in any market whether you trade forex, stocks, futures, commodities, bonds or ETFs.



There are many scalping strategies. This simple scalping strategy is known as the Lucky Spike and it is being used by many traders to make consistent profits each and every day scalping the forex market.



Successful traders follow the K.I.S.S principle. Whatever trading strategy you follow, the simpler you will keep it, the higher the probability of making a winning trade. Lucky Spike Scalping Strategy uses this K.I.S.S principle. Let's discuss it.



Many traders use candlestick patterns in their trading signals. Lucky Spike uses a strong and easily noticeable candlestick pattern. Now, if you have been trading with candlestick charts, you will most probably be aware of the Shooting Star, Morning Star, Hammer, The Hanging Man, Doji and other similar candlestick patterns.



All the above candlestick patterns have one thing in common. A small candle body and long shadows.



You can not only use this strategy for scalping meaning trading on smaller timeframes but also on higher timeframes like the daily, weekly and even monthly charts.



Now, in a strongly trending market, a Lucky Spike Pattern can be anyone of the above candlestick patterns like the Shooting Star, Morning Star, Hammer, Inverted Hammer, Hanging Man or the Doji with a very small candle body and one shadow longer than the other. When this pattern appear in a strongly trending market, it is a signal for a quick trend reversal. Instead of trading trend reversals, we will be only trading one candlestick. When you spot such a pattern, get ready for a quick trade.



In a strong downtrend when this pattern appears, enter at the open of the next candle with a stop loss placed just below the Lucky Spike Lower Shadow. Take profit on the close of the next candle that appeared after the Lucky Spike Candle.



Similarly, in a strong uptrend, go short at the open of the next candle that appears after the Lucky Spike with the stop loss just above the Lucky Spike Upper Shadow and take profit at the close of the next candle. Good Luck!





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Mr. Ahmad Hassam has done Masters from Harvard University. Master these Forex Patterns & download 2 Magic Systems FREE. Get this 82 page PDF Candlestick Patterns Guide FREE!

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