DO NOT UNDERESTIMATE THE 5 MINUTES SMA & BB

Most swing traders are using the 1 hour to daily and weekly chart for their trade positioning. But scalpers or day traders are mainly using the 30 minutes and below candlestick for their entry strategy.

SMA = Simple Moving Average
BB = Bollinger Band

In my own experience using the 5M charts SMA & BB for scalping, this technique has been significantly successful with high success rate. You just need to make sure that you stick to your tight Stop Loss strategy, normally between 25 to 35 pips only.

What is meant here is whenever the SMA and BB start showing a counter trend by turnng the other way and the BB is broken, it is either a good signal to enter or a warning sign for you not to hold your current position.

Yes, though 30 minutes or 1hr may still pointing to the current trend direction, but you must understand that everything begins with the ticker, 1 minute as well as 5 minutes chart. I am personally not recommending the 1M chart as there are too much noise in there.

5 Minutes, or even 15 minutes are better to use.

The reason I am highlighting this is because most of the time, when I am in a profitable trade (I always called it mini swing), say 30 pips in profit, I tend to look at the 30 minutes and 1 hour chart only. When 5M starts to alert me on the broken BB and changed in SMA, I tend to ignore them and still relying on the bigger timeframe chart.

At the end, due to my negligence in referring to the 5M chart SMA and BB warning, I either end up getting 5 pips or total lost on that particular trade.

Another example is when the 5M is telling you to enter when the existing BB and SMA gave me the signal. Since the main trend is opposite, I tend to ignore the signal until the moment I realized that the price has gone too far from the signals (ie 30 pips ++). By that time, it is either too late or too risky for me to enter (for scalping).

Surely bigger timeframe is better for day planning and strategy, but getting in with the best possible price is always better by using the 5 minutes candlestick. It shows the current price action regardless of what the main trend is heading towards.

Even that, be extra careful with whipsaws since smaller timeframe can be deceiving if you are careless. That is why a tight stop loss strategy must be employed at all time in order to protect your account.

Have A Nice Weekend!