Learning how to scalp any sort of London Breakout strategy in any time frame takes practice. You need a solid strategy that you have back-tested thoroughly before testing on a live market. Using this 15-minute scalping strategy requires the same testing and patience.
A resistance zone has formed around the 1.88 price point. This resistance zone was formed during the Asian trading session. So, Ideally, we like to see if we can catch a breakout from this range when the London market opens. If the opening candle itself breaks above the previous resistance, this does not always represent a true breakout. It could sometimes be a fakeout.
As you can see, the price broke out of this trading zone as soon as the London session opened up. However, in that 15-minute candle, we saw the price retrace back into the zone and turn into a large bearish candle with a massive wick on top. This would indicate a fakeout on the lower time frames. The bulls were all stopped. This is why we must be careful and wait for confirmation of a true breakout. This is why I use a simple moving average to help confirm a breakout candle.
The moving average I use helps me with my entries.
I like to see the breakout candle begin on top of the moving average and then I like to see the breakout candle close very close to its high or low. Once I see that this helps confirm my entry. My target for scalping a London market breakout is always around a one to two risk to reward.
On this particular date in November, we can see that the pound has been regaining strength against the US Dollar. On the higher time frames, we are moving upwards. In fact, on the daily time frame, we can see we have finally broken the giant descending trend line that has kept the price below it for the greater part of this year. So, we should always make sure we are trading on the right side of the market. Use a higher time frame bias to confirm your market bias. If the market is bullish and trending upwards, wait for opportunities to go long. Conversely, if the market is bearish, wait for opportunities to go short.
Practicing a strategy like this provides you with one of the greatest skills a trader can have in their bag of tools – patience. Do not just jump into the market when you see a breakout. Make sure all your criteria are met. If your criteria aren’t met for an entry, then watch and wait. Setup alerts, make sure you only enter when your entry signal is beaming. You need to be able to see your entry so clearly. This means you won’t get entries all day every day. With this particular strategy, I may only have a few entries per week. This is perfectly fine and in fact, I like it. It helps me become a better trader.
The Vortex Trader
Prediction Analysis Overview Table
|Analysis Overview Information||Prediction Analysis information|
|On what market is this position based (Forex, Stocks, Crypto, Indices, or Commodities)?||Forex|
|What is the trading position identifier (Name and/or Symbol)?||GBP/USD|
|Is this a Short or Long Position?||Long|
|Would this be considered a Short Term, Medium Term, or Long Term trade?||Short Term|
|As a Short, Medium, or Long Term trade, which best describes the position (Scalping, Day Trading, Swing Trading, or Position Trading)?||Scalping|
|What Time Frame chart is the position based on (1-Minute, 5-Minute, 15-Minute, 30-Minute, 1-Hour, 4-Hour, Daily, or Weekly chart)?||5-Minute|
|Depending on the asset, how much do you expect it to move in price or percentage?||From Entry to Target – 2%|
|What ratio of risk to reward is this trade/position? Choose your appropriate target(s)||Approximately 2 to 1 Target 2 N/A Target 3 N/A|
|What were the technical analysis tools used? Tick the appropriate boxes;||☒ Chart Patterns ☐ Indicators ☒ Price Action ☒ Support & Resistance ☒ Trendlines|
|From the technical analysis tools and indicators provided, tick the appropriate boxes for the tools and indicators used to analyze the position;||☐ Ascending Triangle, ☐ Bollinger Bands, ☒ Candlesticks, ☐ Channel, ☐ Cup & Handle, ☐ Descending Triangle, ☐ Double Bottom, ☐ Double Top, ☐ EMA, ☐ Fibonacci Retracement, ☐ Flag, ☐ Head & Shoulders, ☐ MA, ☐ MACD, ☐ Order Blocks, ☐ Pennant, ☐ Rounding Top Or Bottom, ☐ RSI, ☐ Symmetrical Triangle, ☐ Volume, ☐ Wedge|
Disclaimer: The FSP probability score is derived from adding and subtracting the positive and negative aspects of the position and is not a definitive sign of how the trade will play out. FSP is not in any way a financial advisor