The 1 minute Daily Forex Trading Strategy – Powerful Day Trading Strategy
The 1 Minute Daily Forex Trading Strategy is a scaling system used to trade the major currency pairs. One of the major advantages of this trading strategy would be that it uses two momentum indicators to determine the general direction for the day and the strength of the trend. Trading the 1-minute time frame is not suitable for everyone unless you’re a very short-term trader that can exercise a high level of discipline and self-control. This strategy works solely off of the Parabolic SAR and the RSI indicators which are momentum indicators and has proven to be one of the most effective and reliable trading strategies for traders.
The 1 minute Daily Forex Trading Strategy
Recommended Parabolic SAR Indicator Settings
The Parabolic SAR is a technical indicator and a great tool used to determine the immediate short-term momentum of any currency pair. Since the Parabolic SAR indicator is applied to the 1-minute chart the preferred settings are as follows:
- Step variable = Assign 0.01
- Maximum variable = Assign 0.2
The RSI (Relative Strength Index) which is another momentum indicator is going to use a bigger sample of candles in its calculation otherwise, because we’re trading on such a low time frame we’ll get a lot of false signals. In this regard, the preferred settings for the RSI indicator is 20 period.
The 1 Minute Daily Forex Trading Strategy – Buy/Sell Trading Rules
When applied correctly, the 1 Minute Forex Trading Strategy should be profitable almost every day, but you aren’t going to win every single trade, but what is important here is that you’re going to have net profits at the end of the day. You have to have some experience with it and patience, but you also need to know when to pull the trigger and going forward I’m going to go through the steps of confirmation and what we need to understand to successfully trade using this strategy. Without further ado, these are the buy and sell trading rules of the 1 Minute Daily Forex Trading Strategy:
- Buy signal: After the RSI has touched the 30 level and has turned up, buy at the market as soon as the Parabolic SAR has fallen below the current market price. Place your protective stop loss below the Parabolic SAR and take profits either when the RSI reaches 70 or once you’re in profit by 10 pips.
- Sell signal: After the RSI has touched the 70 level and has turned down, sell at the market as soon as the Parabolic SAR has jumped above the current market price. Place your protective stop loss above the Parabolic SAR and take profits either when the RSI reaches 30 or once you’re in profit by 10 pips.
As an alternative, your stop loss can also be trailed above and below the Parabolic SAR if you want to be more conservative and protect your trades.
The 1 Minute Daily Forex Trading Strategy – Long and Short Trade Examples
In Figure 1 we have the EUR/USD 1-minute chart and a long trading opportunity is presented. By waiting to have confirmation from both indicators we enter at the most favorable time right when the momentum is about to burst.
In the chart below, we have the EUR/USD 1-minute chart and this time a short trading opportunity is highlighted. On this occasion, as it’s noted on the chart the RSI indicator is signaling to take our profits before our static 10 pips take profit level has been reached. Even though we would have reached later our static TP it’s always a good practice to follow entirely the rules of the system.
In the chart below, we have the EUR/USD 1-minute chart and a short trading opportunity is presented, but we’re going to use our second option and manage or stop loss by trailing it below the Parabolic SAR. By using this simple technique we managed to catch +35 pips in profits, which is quite remarkable taking into consideration that we’re trading off of the 1-minute time frame.
In our last trade example below, we choose to trade another currency the GBP/USD to prove the point the rules of the 1 Minute Daily Forex Trading Strategy can be universally applied to all currency pairs. We can note again our hard TP being hit before the RSI is touching the 30 level. With experience and time, you can always choose how to take profits depending on the market conditions.
One major conclusion, we can draw from the last trade example is that by using two momentum indicators (Parabolic SAR and RSI) the 1-Minute strategy will not generate many signals when we have ranging conditions as the two indicators complement each other.
Claim Your $60 No Deposit Bonus Here
All you need is to have your live account verified!
Of course, you need to open a live account...
2 Brokers that we like A LOT!
USD30 from each Forex Broker Below.
Both Forex Brokers have excellent rating!
We use both of these brokers and proudly promote them!NOTE: Not all countries qualify for these bonuses. Terms and Condition Applies.
Other Analysis Today