Price action scalping

Does price action trading work on the minutes timeframe.

“As to methods, there may be a million, but principles are few. The man who grasps principles can successfully select his own methods. The man who tries methods, ignoring principles, is sure to have trouble.”

  • RALPH WALDO EMERSON, POET AND ESSAYIST

I used to trade only on the 1 hour and 4 hour time frame. I still and love trading the hourly timeframes.

But out of curiosity, I wanted to try out what trading the minutes timeframe felt like. But I have never traded the minutes timeframe before. I felt scalping or those trading the minutes time frame were gambling.

I searched for scalping strategies. I saw many strategies. None of these techniques said anything about market dynamics, market behavior or psychology. These many different strategies were not good enough. They were not efficient for one to trade with.

So I took advantage of price action. I applied multiple time frame analysis and price action techniques. If I traded on the 5 minutes timeframe, my higher time frame would be the 30 minutes time frame. If I traded the 15 minutes time frame, my higher time frame would be the 1 HR time frame.

It doesn’t matter  whether you trade daily or 5 minutes time frame. What matters is do you understand the principles of the market. There can be 1000 strategies to something.
But the principles are few. The patterns that form on the daily time frame is the same pattern that forms on the 5 minute time frame. The same choppy patterns that form on the daily timeframe is also the same choppy patterns that form on a 5 minute time frame.

Here are charts below I performed price action analysis.
A 4-hour timeframe and 5 minutes timeframe. If i asked you to tell me which timeframe is which without looking at the write-ups on the chart. You guess wrong or right. But what is common between both is that is that the price action is neat.

scalp 5 mins.png
scalp 4hr.png

6 things you should understand before you scalp?

  • Finding liquid markets

Liquidity tells us there are plenty buyers and sellers in the market willing to buy from you or sell to you. Price action and liquidity are friends. They both work hand in hand. Without liquidity, price action analysis is poor which has a high probability in leading to a losing trade.

  • Waiting for volatility to reduce

Volatility is’nt good for price action trading. It is not liquid friendly.

Volatility comes from a high impact news. It can be a political event like taxes, tariffs,  policies etc. It can be an economical event like interest rate decision, Gross Domestic Product, unemployment rate etc.  It can be a social event like a press release, terrorist actions, elections etc. These events causes spikes in price and spillages.

  • Market structure

A bridge is built with a blueprint. What if there was a mistake in the blueprint. The bridge after or during construction is likely to collapse.

For a trader to trade successfully, he should understand market structure. Market structure is all about how the market moves and the patterns it forms.

  • Key levels

These are liquid levels that provide trading opportunity. These levels are referred to as support and resistance. There are also advanced levels like supply and demand zones. These levels can be horizontal or diagonal (trend lines) or dynamic (moving averages).

  • Candlestick signals

These are your buy and sell signals around these key levels. Candlesticks tell stories between buyers and sellers. It tells when buyers or sellers have the momentum in their favors.

  • Multiple timeframe analysis

Not so fast. Don’t go placing buy and sell orders yet. You want to be sure whether the timeframes are aligned together. The 4 hour time frame may be ranging or in a downtrend. Meanwhile the 1 hour timeframe might be signaling an uptrend or buy signal.

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