⚡Strategy "Market dynamics"
A fast scalping strategy that is implemented in minutes
Last updated
A fast scalping strategy that is implemented in minutes
Last updated
It is difficult to catch an example of a scalping strategy "in the lens". But we managed to capture a classic example of the occurrence of a strait (a sharp price change significantly exceeding the average statistical movement). In this strategy, we will detect straits in advance and get up in its direction. We will also learn how to close a position on time.
To begin with, configure the working window as follows: on the left, the TradingView chart, on which the "Market Dynamic" indicator with a period of 1 minute is open. On the right, open two screeners. Leave the columns "Deviation dynamic", "Price change dynamic", "Mean dynamic", "Market dynamic". On the upper screener, set the "Basis of market dynamics" for 1 minute, and the "sliding window" for 15 minutes. On the lower screener, set the "Market dynamic basis" to 4 minutes, and the sliding window to 1 hour.
The work on detecting the strait is reduced to viewing a screener. It's akin to fishing, where you need to be patient. Sort the screener by the column "Deviation dynamic" on the two screeners. It shows how much the current value of the market dynamic deviate from the average dynamics for the set sliding window. The spill occurs at high values of market dynamics, while there is a sharp increase in this value. Price change dynamic shows the direction of price movement over time, determined by the basis of market dynamics. I.e., this will be the direction of the strait.
We waited for about 10 minutes and found the following market configuration. There has been a significant increase in activity on XAIUSDT. Click on the ticker to open it on the TradingView chart.
According to the price chart, we see that there is a directional short movement, where each next candle is larger than the previous one (with slight slowdowns in the middle). Also, according to the market dynamics chart, we see that the current value significantly exceeds the previous dynamics values. This serves as a signal to continue the movement with an increase.
We decide to enter the short list. It is worth doing this on the market, otherwise there is a high probability of missing the movement. Don't worry, usually the size of the movements significantly exceeds the commission rate on the stock exchange.
At about the moment marked by the blue line, we got into position.
Now our main task is to get out of position. The exit criterion is a slowdown in market dynamics and a candle reversal. If the movement has slowed down and the next candle has formed in the opposite direction (or has almost formed), then this is an exit signal.
Place a market order to sell.
So, in one short movement, we took about 0.5% in about 1-2 minutes. The taker's commission is usually about 0.1%. We remained in the black by about 0.3%. Accordingly, you need to multiply by the shoulder you are playing on. For 10 leverage, this is + 3%.
But we don't stop there, because the movement is not over yet. The dynamics in the market are still very high, while the opposite movement is very likely to occur. We see that a second large green candle is beginning to form, while the market dynamics has slowed down its decline.
We decide to take a long position.
The dynamics of the market continues to increase. This signals continued growth. We continue to hold it.
The dynamics of the market is slowing down, but the reverse candle has not begun to form. We continue to hold it.
The growth of market dynamics is co-directional with the candle. Here we go.
Similarly - hold.
The dynamics of the market has become very high. And we see a significant tail, about 2 percent. This means that the price has hooked the hai and is starting to return. And quite rapidly. This is the moment when you should keep your finger on the pulse and get ready to go out. In fact, the profit from this transaction has already turned out to be significant. Therefore, you could close it right at this moment.
But if you follow a strict strategy, then you need to wait for the formation of the next candle. The price is falling and a red candle is forming, while the market dynamics is falling. This is the exit signal.
We would have earned about 0.3% from the first deal. From the second transaction, about 5% (taking into account slippage and the human factor at the time of decision-making and placing an order). On the first leverage.
In total, the operation of searching and working with positions took about 15 minutes. At the same time, the profit was about 5% on the first leverage.
IMPORTANT! Trading involves risks. The user is solely responsible for their actions or inactions when using the described trading strategy. The strategy and its description are for informational purposes only. The information provided here does not constitute personalized investment advice. News, articles, expert comments, research, forecasts, and other information are presented without considering any specific investment profile, and the financial instruments or operations mentioned may not align with the expected returns, investment horizon, or acceptable risk levels for any particular user. Company 1EX is not responsible for any potential losses resulting from trades based on the described strategy or investments in the financial instruments mentioned in this publication.
