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Forex & Stocks MA-RSI SCALPING Strategy


Even if you’re just starting out in trading, chances are you’ve encountered the term “scalping” at some point. It’s akin to day trading in that you aim to make quick profits during a trading session, but it operates on a much faster and smaller scale.

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So, what exactly is scalping?

Scalping is arguably the riskiest trading strategy you can undertake. Many traders avoid it and opt for long-term trading instead.

Some argue that due to its fast-paced nature, it can easily resemble gambling.

However, that doesn’t mean you should completely rule it out as your preferred trading strategy. When executed simply and effectively, scalping can be highly profitable.

If you’re wondering how to get started with scalping, we’ll discuss some key tactics to help you determine which scalping trading strategy might suit you.

What’s the optimal time frame for scalping?

Are you into scalp trading on the ten-second, one-minute, two-minute, five-minute, or fifteen-minute chart?

Typically, most scalping traders operate on the 1-minute and 5-minute charts, but there’s another faction that delves into time frames shorter than one minute.

Personally, I prefer to scalp trade on the 1 Minute chart because it aligns with my trading style.

I also employ the MA-RSI or Moving AveragesRelative Strength Index trading system for scalp trading on the 1 Minute time frame. This Forex 1 minute scalping strategy serves as a solid starting point for Forex novices, as it’s relatively straightforward to implement. However, bear in mind that this strategy requires a certain level of time commitment and focus. If you’re unable to allocate a few hours per day to trading, it might not be suitable for you.

Given that you’re only aiming for a few pips per trade, it’s crucial to select a broker with minimal spreads and commissions.

Considering the modest targets per trade, one of the key elements of forex scalping is volume, and it’s not uncommon for traders to execute more than 100 trades a day.

The prerequisites for the MARSI scalping strategy include:

  • Instruments: any currency pair
  • Optimal Time frame: 1-minute
  • Indicators: 8 Period RSI and two Simple Moving Averages (SMA), 34 & 10
  • Preferred sessions: London and New York – high volatility

Though this Forex scalping strategy is applicable to any currency pairs, it could be more convenient to implement it with major currency pairs due to their narrow spreads. Furthermore, this method tends to yield better results during high volatility trading sessions, typically the London and New York sessions.

Is Scalping Strategy a Suitable Style For You?

Determining whether scalping is a fitting trading approach for you largely hinges on the amount of time you’re willing to commit to trading. Forex scalping demands continuous analysis and the execution of multiple orders, which can be as demanding as a full-time job. Moreover, there are only limited hours in a day conducive to scalping currency pairs.

Following time availability, the next crucial aspect is the ability to think swiftly on your feet.

For a scalping strategy to yield profits, you must swiftly anticipate market movements and execute trades within seconds. When formulating these trading predictions, it’s essential to factor in herd psychology, which significantly influences market dynamics.

In addition to forecasting market direction, traders interested in adopting scalping strategies must be prepared to absorb losses. This becomes particularly vital when trading with leverage, as it can magnify both profits and losses. While the primary goal is to secure more profitable positions than losing ones, knowing when to exit trades that aren’t going according to plan is equally crucial.

So, if you believe scalping strategies suits your style, let’s proceed to the next section.

Best Scalping Trading Strategy

We’ve presented a straightforward yet profitable trading strategy along with advanced techniques applicable to the forex & Stocks market. Whether you’re a novice or seasoned trader, the optimal choice will depend on your day trading style and objectives.

MARSI Scalping Strategy

Using Moving Averages Crossover as a Short-Term Trend Indicator

Because Moving Averages lag, the crossover technique might not precisely capture tops and bottoms. However, it can assist in identifying the bulk of a short-term trend.

A moving average crossover aids in addressing three questions:

  • First – In which direction might the price trend (if at all)?
  • Second – Where could be a potential entry point for a trend trade?
  • Third – When might a trend end or reverse?

All you need to do is add a couple of moving averages to your chart and wait for a crossover.

If the moving averages cross each other, it could indicate an impending trend change, offering you a chance for a better entry. With a better entry, you have the opportunity to capture more pips!


Using the 10-Period RSI as a Trade Signal (to Identify the Best Entry)

Certain scalping trading strategies harness market momentum to determine optimal entry and exit points. The Relative Strength Index (RSI) functions as an oscillator capable of forecasting the future direction of an asset over a specified period.

The RSI assists in identifying overbought prices; specifically, if the RSI exceeds 75, the market is considered overbought, while if the RSI falls below 25, the market is deemed oversold. The most effective approach to integrating this oscillator into your scalping trading strategy is by configuring it on a 1-minute chart.

Developed by J. Welles Wilder, this technical indicator evaluates both the direction and strength of price trends, empowering traders to decide whether to initiate or terminate a trade, refrain from trading, or augment an existing position. Consequently, the indicator can furnish trade signals when it behaves in a particular manner.

The RSI indicator can indicate the robustness of a trend. When a trend displays vigorous momentum, there’s a heightened likelihood of price continuation in the same direction.

Therefore, you can anticipate the price to persist in its current trajectory. Therefore, whenever you seek to gauge the strength of a security’s trend, simply refer to the RSI indicator’s indications.

The range between 45 and 55 on the RSI indicator signifies a price consolidation area. Therefore, if the RSI line is above the 55 level, it is assumed that the market is still in a bullish condition. Consequently, traders can maintain their BUY positions as long as the RSI line remains above the 55 level. Conversely, when the RSI line falls below 45, the market is presumed to be in a bearish condition. Therefore, traders can hold onto their SELL positions as long as the RSI line remains below the 45 level.

Utilizing the RSI as a trade signal indicator proves most effective when coupled with trend indicators like moving averages. This synergy aids in pinpointing market bottoms during an upswing or peaks during a downtrend. In essence, by employing the RSI as a trade signal indicator, you can fine-tune your entry timing within a trend.

How to install “TraderVersity-MARSISCALPING
  • Download “TraderVersity-MARSISCALPING” (Zip/RAR File).
  • Copy mq4 and ex4 files to your Metatrader Directory …/experts/indicators/
  • Copy the “TraderVersity-MARSISCALPING.tpl” file (template) to your Metatrader Directory …/templates /
  • Start or restart your Metatrader Client.
  • Select Chart and Timeframe where you want to test your forex system.
  • Right-click on your trading chart and hover on “Template”.
  • Move right to select “TraderVersity-MARSISCALPING” trading  system and strategy
  • You will see “TraderVersity-MARSISCALPING” is available on your Chart
BUY Rules

In this example, you have the 34-period and 10-period Simple Moving Average (SMA) applied to the price chart. When the short-term SMA is above the long-term SMA, it signals an uptrend.

Now, by using the RSI indicator, you can observe that bullish momentum is revitalized each time the 10-Period RSI falls below 55, but not below 45.

When the RSI indicator begins to climb back above 55, the bullish trend resumes, thereby providing traders with a favorable entry point into the trend.

Ensure to set your stop-loss at the swing low formed by the bullish price surge and set the take-profit at two times the risk on the stop-loss.

SELL Rules

For a sell entry, wait until the short-term Simple Moving Average is below the long-term Simple Moving Average, signaling a downtrend.

And now, utilizing the RSI indicator, you can notice that bearish momentum is rejuvenated each time the 10-Period RSI rises above 45, but not above 55.

When the RSI declines back below 45, enter at the candle close corresponding to when the RSI crosses below 45. Set your stop-loss at the swing high created by the bearish price thrust and set your take-profit at two times the risk on the stop-loss.

Trading NOTES

Ensuring that trading signals have high accuracy by utilizing confirmation of price action patterns.

This is one of the most effective ways to enhance the accuracy of any Scalping strategy. Namely, only initiating a position when a trading signal is supported by a price action pattern such as Pin Bar, Engulfing, Triangle breakout, etc.

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