Search for a 1 minute scalping strategy, and you will be flooded with results for indicator-based strategies.
While they may claim to be profitable, and we aren’t here to dispute that, what is worth questioning is that indicators, in general, are lagging behind the market, and so, would combining a lagging indicator with one of the lowest timeframes available be a wise choice?
It’s based on probabilities, you might say. So does trading an indicator-based 1 minute scalping strategy amount to flipping a coin?
With this in mind, is there a smarter way to build a 1 minute scalping strategy? Maybe if we started by looking into liquidity and how this can affect short-term price movements, we might start to find a more reliable base for our 1 minute scalping strategy.
So instead of giving you a couple of indicators and sending you on your way with false promises of untold wealth, we will look into what makes the market move and how to trade from these areas where we could reasonably expect a market reaction.
By the end of this article, we should have the makings of a profitable 1 minute scalping strategy that doesn’t rely on moving averages or magical levels but rather an understanding of liquidity and the unchanging reaction of the market from areas of liquidity.
While indicator-based strategies are prone to drawdown periods, liquidity pools will always be there, and the price will always react in these areas.
As long as there is a market to trade, there will be liquidity pools.
These will continue to move price no matter the time of day, season or what your moving average crosses are saying.