Simple Scalping Strategy Called Lucky Spike!

Many traders use scalping as their main trading strategy. Scalping means quickly entering and exiting the market making a few pips every time. Most scalpers look for making a quick 10-20 pips each time they enter and exit the market. By making a few high probability scalping trades every day, you can make 30-60 pips easily.

There are many scalping strategies. This simple scalping strategy is known as the Lucky Spike and it is being used by many traders to make consistent profits each and every day scalping the forex market.

Successful traders follow the K.I.S.S principle. Whatever trading strategy you follow, the simpler you will keep it, the higher the probability of making a winning trade. Lucky Spike Scalping Strategy uses this K.I.S.S principle. Let's discuss it.

If you have been trading for a while, you must be familiar with the candlestick patterns like the Shooting Star, Morning Star, the Hammer, the Inverted Hammer, the Hanging Man or the four types of Dojis.

What is the common characteristics in the above patterns? They all share one common thing, a small candle body and long shadows.

Lucky Spike Strategy can be used on smaller timeframes as well as on the daily, weekly or even on monthly charts. You will be trading only one candlestick in this strategy. First determine that the market is in a strong uptrend or a downtrend. You can use the Heiken Ashi Indicator to find out whether the market is in a strong uptrend or a downtrend.

Now, in a strongly trending market, a Lucky Spike Pattern can be anyone of the above candlestick patterns like the Shooting Star, Morning Star, Hammer, Inverted Hammer, Hanging Man or the Doji with a very small candle body and one shadow longer than the other. When this pattern appear in a strongly trending market, it is a signal for a quick trend reversal. Instead of trading trend reversals, we will be only trading one candlestick. When you spot such a pattern, get ready for a quick trade.

When you find anyone of the above patterns in a strong downtrend with a small candle body and one long shadow, go long on the open of the next candle with the stop loss placed just below the lower shadow of the Lucky Spike. Take profit at the close of the next candle.

In the same manner, if you find the Lucky Spike appearing in a strong uptrend, go short on the open of the next candle with the stop placed just above the upper shadow of Lucky Spike. Take profit at the close of the next candle.

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