There are a couple of different ways to look at a 1-minute forex strategy. It could mean that you check your trading platform for one minute each day to see if there are any buy or sell signals. Alternatively, it could be a forex scalping strategy that has been developed specifically for trading on the 1-minute charts. Either way, I will cover both of these options including the pros and cons of each, along with a few examples of simple 1-minute strategies that you can implement into your day trading routine.
1-minute forex scalping strategy
If you like lots of action, then a forex scalping strategy in the 1-minute charts could be for you. There will be plenty of trading signals and you can use it on any currency pair that you wish. However, because there can be a lot of market noise on the 1-minute charts, it can be hard to filter out the good from the bad signals. That is why I would always combine different types of market analysis rather than rely on one technical indicator alone.
A forex scalping strategy involves targeting a few pips on each trade. The goal for scalpers is to grow their trading account by continuously taking small profits that can lead to bigger gains over the long term. Scalping is popular because it provides plenty of opportunity and can compound accounts quicker if the forex trader is successful.
That being said, scalping the forex market is one of the most difficult ways to trade from my experience. Success can depend on so many factors including the forex brokers spreads and your forex money management. I would always look to use an ECN forex broker as I find them to have some of the lowest spreads and quick execution speeds which is vital when scalping a few pips here and there.
With all 1-minute forex strategies, I think you could improve your success rate if you first check the higher chart timeframes. For example, if the 1-hour chart was showing price above the 14-day moving average, you might only want to look for long (buy) trades. If price is below the moving average on the 1-hour chart, that could be a filter for short (sell) trades only.
You can even take it one step further and confirm the trend direction on all chart timeframes from the 1-miunte chart through to the weekly. That may limit signals but could increase probability.
- Price is above the 14-day moving average
- The MACD (12,26,9) main line is above the signal line
- Stop loss is recent support level
In the EUR/USD 1-minute chart below, you can see that the above conditions were met. We had established there was a short-term uptrend with the moving average indicator, whilst the MACD indicator was showing a possible trend reversal to the upside. This was further confirmed with a three white soldiers candlestick pattern. All of the signs were there for a buy trade, with the recent support level being a possible stop loss area.
- Price is below the 14-day moving average
- The MACD (12,26,9) main line is below the signal line
- Stop loss is recent resistance level
In this EUR/USD 1-minute chart below, the price is below the moving average and the MACD main line is below the signal line. There is an engulfing candlestick pattern to the downside and a clear area of resistance where we could have placed the stop loss. Exit could have been when price went back above the moving average or when the MACD main line crossed back over the signal line.
1-minute forex scalping strategy Pros & Cons
- Lots of trading signals
- Can be used on any currency pair
- Can use any combination of technical indicators
- Tight stop loss to limit risk
- Requires ideal broker conditions
- Scalping can be quite difficult to master
- Needs very good trading discipline
- More false signals compared to higher timeframes
1-minute forex trend trading strategy
If you are short on time and nervous at the thought of scalping the 1-minute charts, you might want to look at a larger chart timeframe. If you only had 1-minute to check the charts each day, you could always use a daily chart and trade in line with the trend.
That way you could fire up your trading platform and browse daily charts of your chosen currency pairs for any signals. If there was an opportunity, you could place a pending order with a stop loss and take profit in place, then go about your daily business and let the trade playout.
This can save you lots of time but does mean that there will be less opportunities. This is because trading signals tend to be less frequent on the daily charts. You will be able to catch some big moves but it could take longer to grow your account. However, it is a lot less stressful in my experience.
- Stochastic main line crosses over the signal line
- Stochastic is below the 20 “oversold” level
- Stop loss is just below recent support
In the EUR/USD daily chart below, you can see there is only a stochastic oscillator on the chart. I find that the daily charts need less indicators to confirm signals as they already include plenty of data in the form of price action analysis. There is a stochastic crossover that has happened below the oversold 20 level. This tells me that price is turning up and that sellers might be fading out. We have also seen consecutive down bars which means that we must eventually see some up bars, which comes in the form of an engulfing bar. This again, suggests a turn to the upside.
We could have placed the stop loss just below the recent support which would have given us a favourable risk to reward ratio on this trade. The trade could have been exited a few days later when there was an extreme stochastic crossover in the opposite direction. In total, we could have had a 50 pip stop loss and made around 400 pips. When you consider that scalping usually targets a few pips per trade, you can see the benefit of trading the daily vs 1-minute charts.
- Stochastic main line crosses below the signal line
- Stochastic is above the 80 “overbought” level
- Stop loss is just above recent resistance
In the EUR/USD daily chart below, you can see there was a possible trading signals immediately following the buy trade above. This time, the stochastic crossover happened to the downside in the extreme overbought (80) area. There is an inside bar and as you can see, the price continued downwards.
If we again used the opposite stochastic crossover as an exit point, this trade could have made over 300 pips in just a few days. Combine that with the buy trade above and we are looking at around 700 pips in just over one week.
1-minute forex trend trading strategy Pros & Cons
- Only takes a minute to look for signals
- Can be less stressful
- Daily chart signals tend to be more reliable
- Can catch some big moves
- Less trading signals
- Might require a larger stop loss
- Can take time to compound an account
Conclusion: is trading 1-minute forex strategies for me?
I think that both the 1-minute forex strategy examples I have shown here can be used by traders of all types and experience levels. Yes, they are quite basic and you can take things up a notch by adding additional technical analysis and fundamental analysis to confirm the trades. You can also check other timeframes for further confirmation.
The most important thing is to trade in a way which works for you because every trader is different. What works for someone else, may not work for you and vice versa. You will also need to have a solid money management strategy in place. Ideally, I would want to only take trades that present a favourable risk to reward ratio of at least 1:3. It can be very frustrating seeing one bad trade wipe out a good run of winners.
If you want to practice these 1-minute forex strategies, you can always get a free forex demo account from most forex brokers. This can be a great way to improve your trading skills and build your confidence without any risk. Once you start seeing some progress, you can always make the switch over to a live account.
Self-confessed Forex Geek spending my days researching and testing everything forex related. I have many years of experience in the forex industry having reviewed thousands of forex robots, brokers, strategies, courses and more. I share my knowledge with you for free to help you learn more about the crazy world of forex trading! Read more about me.