1-minute chart scalping - example of a signal with 5 consecutive wins in 43 minutes

As a supplement to the previous article, the lower chart in the figure shows USDJPY 4-hour 100-pip reversal, and the upper chart shows USDJPY 50-pip reversal on the N-shaped Entry Indicator.

On the left, the vertical red line marks 2017-10-16 08:00, aligned almost to the same time axis.

In the lower 4-hour chart, after the upward arrow indicates a bullish transition and before the downward arrow indicates a bearish transition, the upper 1-hour chart shows three 50-pip reversals that turned from bearish to bullish.

Each of the three bullish turns on the 1-hour chart crosses the preceding highs and valleys.

This is a reproduction of Dow Theory.

The N-shaped Entry Indicator picks up important highs and lows, so it can be used not only for Dow Theory and Elliott Wave analysis, but also as a guide for entry and exit timing.

By the way, when the upward arrow on the USDJPY 1-hour chart in the upper figure appears, buying in the direction of the trend with a stop loss placed at the previous valley and a take-profit limit order at the previous peak would yield about 107.9 pips in roughly two weeks; for 10,000 units, 10,790 yen; for 100,000 units, 107,900 yen.

Now, how about scalping using a 1-minute chart?

Even on a 1-minute chart, as human psychology enters the market, Dow Theory can be reproduced.

The bottom figure shows a USDJPY 1-minute chart where, using a trend based on an N-shaped Entry Indicator set to a 15-pip reversal in green and orange, and buying/selling with another N-shaped Entry Indicator set to a 5-pip reversal in blue and red, there is a case of 5 consecutive wins.

As shown in the earlier 1-hour and 4-hour charts, if you set the reversal on the 1-hour chart to two settings of 50 pips and 100 pips, you can display both on one chart.

In the above figure, after the 15-pip reversal line with a green upward arrow turns bullish, before the orange 15-pip reversal line shows a bearish candle, the 5-pip reversal line repeats bearish-bullish six times.

This time's trading rule is contrarian: while the green 15-pip reversal line is turning bullish, that is, when the trend is upward, place a buy entry at the open price immediately after the red line's downward arrow prints a bearish signal, set the stop loss at the previous valley, and place a take-profit limit order at the previous peak.

The profit-and-loss simulation for the trades in the above figure is Case 1 in the figure below.

There are 5 consecutive wins in 43 minutes, totaling +16.2 pips.

Incidentally, if you entered at order number 1 and held the position until the 5-pip reversal line crossed the previous peak to bearish exit, as in Case 2 above, it would be +16.5 pips.

For 10,000 units traded, 1,650 yen; for 100,000 units traded, 16,500 yen.

The 5-pip reversal settings on the above 1-minute chart are shown below.

Only the parts that differ from the default settings are boxed in red.

The 15-pip reversal settings on the above 1-minute chart are shown below.

Only the parts that differ from the default settings are boxed in red.

FX can be approached in many ways.

Using longer timeframes for multiple currencies to aim for total operating profit, or using shorter timeframes to increase profit opportunities and accumulate small gains—N-shaped Entry Indicator can accommodate either approach.

The fundamental reason is that it is based on Dow Theory and Elliott Wave analyses, which have long been grounded in human psychology.