In the 1-minute timeframe, trading involves quick decisions and rapid execution. Here are some of the most effective patterns and strategies for this short-term trading:
1. **Bollinger Bands**:
- This indicator consists of a middle moving average line and two bands above and below it, which indicate volatility. A buy signal may occur when the price touches the lower band and then rebounds, while a sell signal may occur when the price touches the upper band and then reverses.
2. **Price Action Patterns**:
- **Pin Bar**: A candlestick pattern that indicates a potential price reversal, characterized by a long tail and a small body.
- **Engulfing Pattern**: A pattern where a new candlestick fully "engulfs" the previous one, suggesting a potential market direction change.
3. **Scalping with Moving Averages**:
- Using short-term moving averages (such as MA 5 and MA 10) to identify buy or sell signals. A buy signal may appear when the shorter MA crosses above the longer MA, and vice versa for a sell signal.
4. **Momentum Indicators**:
- **Relative Strength Index (RSI)**: Helps identify overbought or oversold conditions. In the 1-minute timeframe, RSI is used to detect potential price reversals.
- **Stochastic Oscillator**: Identifies overbought or oversold conditions and assists in determining optimal entry and exit points.
5. **Small Support and Resistance Levels**:
- Identifying small support and resistance levels in the 1-minute chart can help determine potential entry and exit points. Breakouts from these levels are commonly used in scalping strategies.
6. **Trendlines and Channels**:
- Using trendlines to identify the market direction and price channels to determine buying and selling zones.
Trading on a 1-minute chart requires fast execution and strict discipline. Traders often combine multiple patterns and indicators to improve their trading accuracy. Always maintain tight risk management due to the high volatility in such short timeframes.