Support and Resistance Scalping Strategy is a very short-term trading strategy. This trading system works on a 15-minute chart or less. There are two types of using support and resistance with a scalping strategy, which we will discuss in the following points.
Support and Resistance Strategy for Scalping Strategy - Long Positions
How do we take a long position in the market using a support and resistance scalping strategy? To answer this question, we will first start by identifying a price chart where the price is trading near a support level. When this happens, we then wait for the Bollinger Bands to start contracting. You will also notice that the Fibonacci levels will start drawing automatically.
When you see this setup forming, you need to look for a bullish candlestick pattern forming near this support level. When you see a reversal pattern like a bullish engulfing or something similar, you can then initiate a long position in the market.
Set your stop loss to the lowest level, just below the support level. This will ensure that your stop loss is tight and when the stop loss is reached, it is because the price is likely to reverse direction.
To take profits, you can make use of the Fibonacci indicator that plots the levels for you. You can use the 1.618% Fibonacci extension as a potential take profit level. It is also best to see the confluence of a Fibonacci level with a resistance level on the price chart as well.