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The trading strategy Impulse Candle M1 is a scalping trading system for working on small time frames. It is based on candlestick analysis and is easy to use. The basis of this strategy is the idea of entering into a trade on the impulse of price. The strategy is universal and suitable for use on any trading activities.
Impulse definition
To correctly determine the momentum of the price, you should have a clear idea of what an impulse is. An impulse in the market is a quick, abnormal price spike in a certain period of time. The smallest time frame available for finding momentum in Forex is a 1-minute time frame. Therefore, determining the momentum is best on it.
Detecting momentum on the M1 chart is quite simple. The candle on which the impulse appears usually stands out among the rest by its size. It is always bigger than the closest neighboring candles. In this trading strategy, it is important not only to correctly determine the impulse but also to understand whether this impulse will continue or decay.
A candlestick analysis will help to figure this out, the combination of candles which, with a high degree of probability, will show where the continuation of the impulse is possible, and where it fades.
If on the M1 chart, the size of the current candle is much larger than the other candles - this is an impulse. If, after the candle is closed, her body is not much smaller than her size, and this candle has a short tail in the direction of the impulse, this is the first sign of an undamped impulse. In addition, the formed candles following the candle with an impulse will also suggest the correct solution.
In this trading strategy, to confirm the continuation of the impulse, two candles are used that will form after the candle with an impulse. They should be much shorter with respect to the impulse candle and located at the top (if it is an impulse to increase) or at the bottom (if it is an impulse to decrease) of an impulse candle.
Conditions for opening a BUY trade
Conditions for opening a SELL deal
Stoploss and Takeprofit
Based on the rules of this trading strategy:
- the stop-loss is set at the opposite end of the candle from the impulse.
- The size of the take-profit depends on the size of the stop loss and twice as much as it.
Conclusion
The Impulse Candle M1 trading strategy is a dynamic scalping system, which, due to the possibility of applying to most trading actives, can give a good number of profitable trades. But it is worthwhile to understand that with such dynamism, strict discipline and high concentration are necessary. Use it on the number of actives that you will be able to control.
