Many traders love scalping as their main trading strategy. The reason is simple. As a scalper, you are done in just a few minutes when you enter and exit the market quickly making fast profits each time.
There are many scalping strategies. This simple scalping strategy is known as the Lucky Spike and it is being used by many traders to make consistent profits each and every day scalping the forex market.
Successful traders follow the K.I.S.S principle. Whatever trading strategy you follow, the simpler you will keep it, the higher the probability of making a winning trade. Lucky Spike Scalping Strategy uses this K.I.S.S principle. Let’s discuss it.
If you have been trading for a while, you must be familiar with the candlestick patterns like the Shooting Star, Morning Star, the Hammer, the Inverted Hammer, the Hanging Man or the four types of Dojis.
All these candlestick patterns are similar in the sense that they have small bodies and long shadows or wicks. These type of candlestick patterns are also known as indecision patterns as when they appear it means neither the sellers nor the buyers are dominating the market.
You can not only use this strategy for scalping meaning trading on smaller time frames but also on higher time frames like the daily, weekly and even monthly charts.
When you find anyone one of the above patterns appearing in a trending market, get ready for a trade.
When you find anyone of the above patterns in a strong downtrend with a small candle body and one long shadow, go long on the open of the next candle with the stop loss placed just below the lower shadow of the Lucky Spike. Take profit at the close of the next candle.
Similarly, when you find the Lucky Spike appearing in an up trending market, enter into a short trade at the open of the next candle. Place the stop loss on the high of the Lucky Spike and take profit on the close of the next candle!