Scalping NASDAQ - My Number 1 Strategy

Before we go into the details of the strategy, I need to mention that this is a very aggressive and very high-risk strategy and should be tested by experienced traders only. You should also never execute a trade without a stop loss and I strongly recommend trading on a paper account.

It’s important that you have experience with NASDAQ and can read its chart.

Let’s get to it. We will be scalping NASDAQ on 1-minute chart using MACD indicator, EMA 20/50/100/200, Supertrend and we will also monitor SP500 on a 5-minute chart with MACD.

If you own MarketCipher, it will help you to improve results. I use MarketCipher to front-run some MACD crosses or validate the trade. However, it’s not a must.

Critical part – the strategy works when the market is volatile so it’s important you’re able to identify volatility.

Setting Up Charts

I use TradingView with a split window. I have 5 min chart for SP500 on the left and 1 min chart of NASDAQ on the right.

For SP500, add standard MACD (with default settings) and add Supertrend (with default settings). Don’t forget to be on the 5-minute chart.

For NASDAQ, add standard MACD (with default settings), add EMA 20/50/100/200, add Supertrend (with default settings) and if you have MarketCipher, add MarketCipher B as well. To have the MarketCipher B a little bit cleaner, open settings, go to Style and untick 100%, OB 1 Solid, OS 1 Solid, Trigger 1, Trigger 2, RSI, and Sto RSI.

When you’re done, your chart should look like this the below.

Why do I have both SP500 and NASDAQ next to each other when I scalp NASDAQ only? The reason is simple. SP500 and NASDAQ are moving in very similar ways. Most of the time, the SP500 front runs NASDAQ and can indicate the next NASDAQ direction. It also helps me to monitor if I should stay in the trade for a bit longer or if I should jump out.

NASDAQ Scalping Strategy

Now that we have everything ready, we can get to the details of a strategy. I’m using 100 000 USD account with a 1:100 margin and the maximum loss I’m willing to take on trade is 2% of the account/2000 USD (40 pips for me). I’m trading with 5 lots and I don’t change it. 

There is no reason to be greedy. You’re trading a 1-minute chart so there is a lot of opportunities during the day. I also don’t usually trade the first 30 minutes of the US session. Although this strategy loves volatility, the volatility during opening is too high. You can be +1000 USD and within a few seconds your stop loss may get executed.

The most important for this strategy is MACD. Other indicators are supportive only. The key is crossing of MACD line and Signal line. It has to be confirmed crossing so always wait for the candle to close. Don’t try to predict the cross. Always wait for confirmation.

Once the MACD line and Signal line cross and the cross are confirmed, you’re good to enter a trade. I sometimes wait a couple of seconds on the candle as it likes to move a bit back giving me a little bit more on the upside.

Once you’re in the trade, it’s also about when to close it. This is where SP500 5 min chart comes in handy as it gives you an understanding of the direction and size of a movement. If there is little volatility, I tend to take profits around 300-500 USD. If there is good volatility and direction, I tend to let the trade go. When the trade is +1000 USD, I move my stop loss to break even to be on the safe side and target 1500-2000 USD profit-taking. I definitely close some of the trades too soon but I’m happy with the profits and as this is a 1-minute chart, I apply the “better safe than sorry” approach.

If the MACD line and Signal line on the SP500 chart crosses, you have a chance of a pretty solid movement so it’s worth staying in the trade.

EMA 20/50/100/200 is a supportive indicator. I use it to get a general understanding of trends. If we have a less volatile/trending environment, the NASDAQ 1 min chart trend respects the EMA20. It can get up to EMA50 and then bounce back (example below). If we have a trend respecting the environment, don’t bet against the trend – play with the trend. I don’t enter trades as MACD often closes too late and this strategy doesn’t capitalize on EMA bounces.

Supertrend is a supportive indicator. If you enter a trade and Supertrend is close to crossing the turning point – going from Sell to Buy or from Buy to Sell – you want to pay attention and decide if you want to stay in the trend. Movements after the crossing of Supertrend are pretty strong. However, they are also pretty strong if the Supertrend line is rejected.

MarketCipher B is a trigger indicator and supportive indicator at the same time. It’s unnecessary for this strategy, but it can help you make some extra profits. What MarketCipher B does is helps to indicate that the MACD line and Signal line are about to cross. On MarketCipher, you want to focus on blue waves only. If you have a big blue wave that crosses and shows either a red or green circle, you wait for a second wave which is smaller, and again wait for the wave to follow with same red or green circle. Once that happens, it indicates that the movement is losing traction and the short-term trend is about to reverse. Once the candle closes, you can enter a trade, and usually this is then followed by MACD crossing as well. You want the MACD lines as close as possible as well. If you’re not familiar with MarketCipher B and you want to buy it (you can buy MarketCipher here), I recommend you spend time studying the indicator and watching a couple of CryptoFace’s videos first before implementing it. I’ve also written an article about MarketCipher so feel free to check that as well.

And that’s it, you’re good to go. I will record a demo video a little bit later to show it all in action.

Couple of Tips

When the market has lower strength to push to the opposite side, you can get a false crossing of MACD and Signal lines. In that case, close the trade and don’t wait for the stop loss to hit. Most of the time, this will continue the trend and it will hit your stop loss. This will help you to protect some of the capital. Remember that protecting your capital is the most important thing.

MACD false crossing

Avoid randing MACD. There are situations when movement is not clear and MACD provides fake crosses with no clear direction. If you see this, wait for clear direction. Be patient, don’t force trades. What can help you to see future direction is monitoring the MACD of SP500. But in general, I recommend just sitting it out.

The best session to trade is the US session. It provides enough volatility. EU session has a tendency to go in the range making it difficult to scalp with high leverage.

Do not trade first 15-30 minutes after the US session opens.

Do not trade 30-15 minutes before the EU session opens.

1,5 hours before the US session opens tend to provide more false MACD crossing so monitor very closely. Especially on Monday.

Accept losing trade quickly and move on. There will be losses, but there are enough opportunities.

Don’t be greedy. If the trade has low movement, lock your profits. A small win is always better than a big loss.

Never trade without a stop loss.

Always follow the strategy rules.

Get used to NASDAQ movements. Watch the chart and study the candles. It will help your decision-making.

Don’t hold trades for too long. I usually jump out within a couple of minutes. Some trades within 30 seconds.

Don’t try to predict MACD crossing. Wait for confirmation.

One More Tip

If you want to improve the results of this strategy, I suggest you follow Trades by Matt and check the setup of his charts on Tradovate. Watching Cumulative Delta on 22 Range does significantly improve decision-making. Matt is also a professional trader who trades NASDAQ, so I recommend watching his daily videos.

Results

I’ve created a demo account on FTMO with 100,000 USD and I’ve chosen an aggressive risk mode. Didn’t really need it at the end but wanted to be on the safe side. I’ve used Metatrader 5 platform as FTMO doesn’t offer cTrader for demo accounts anymore. As you can see, 6 days of trading got me to 10 000 USD profit.

https://trader.ftmo.com/metrix?share=22af67d8fc3b

You can download the trades here if you want to review trade by trade.