Steemit Crypto Academy | Homework summary - The scalp trading style (Using the Finger trap strategy)

It has been yet another great Crypto educational week on Steemit. This time around I shared with my students about the scalp trading style. As someone who wants to venture into Crypto trading, it’s important to learn of the different trading styles that various crypto traders use in their trading venture.

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I realized that the assignment I gave was quite a tough one after seeing no response to the assignment for 3 days. Later on, users submitted their articles. A few of them got higher ratings and some of them just did not understand the assignment according to the work they submitted.

These are my favourite picks for the week. They deserve an extra reward for the effort put into their work.

Author	Post(The Finger trap Scalping strategy)
@asaj	Post link
@cryptokraze	Post Link
@reminiscence01	Post Link

The homework task was about scalp trading using the Finger trap scalping strategy
The finger trap scalping strategy is one of the best scalping strategies. It is also termed "a momentum trading strategy". The strategy entails various important components/elements that help a trader to have more profitable trades if its steps are well observed and carefully implemented in your trading.

• Trading charts Time frames 1 and 5 minutes
  The highest time frame to look at while scalping is the 1 hour time frame, where you get the general trend to follow while executing your trades in the lower time frames, especially the “5-minute time frame.”

• Exponential Moving averages 8 & 34
  The quick-moving average 8 and a slow-moving average 34 are other great components of the finger trap scalping strategy. These 2 EMAs (8&34) aid a scalper in identifying the trend and this is an important part in trading. They usually say “the trend is your friend.” And that’s a fact. If a trader wants to ensure profitability and consistent good trading, he has to trade in the direction of the trend.

For the downtrend – The 8 EMA is below the 34 EMA. You will look for sale entries in the 5-minute chart.
For the Uptrend – The 8 EMA is above the 34 EMA. You head over to the 5-minute chart and look for good buying signals.

ETHUSD 5-minute chart

Note: Strictly trade with the trend. Even though you see a good signal in the opposite direction of the trend, you must ignore them. Discipline and sticking to the rules of the finger trap strategy is key.

• Entry and exit strategy
  Trade entries are done in the 5-minute chart. Whenever the price closes below the 8EMA, then that serves as an entry trigger for a sale.
  Exit strategy – When the trade makes for you about 10-15 pips, you should exit the trade and wait for another good trade entry position.
• Stochastics – RSI
  You may also add to your arsenal other indicators like the Stochastic, RSI to help you out in identifying good entry and exit positions

*Candlestick pattern
Candlesticks are a good leading indicator. You, therefore, need to carefully read and follow the price action. Candlesticks help a lot in predicting the direction of the market. These are also supposed to be added to your arsenal while using the Finger trap strategy.

• Trade management
  This is another key element of the Finger trap strategy. It entails setting a stop loss for every trade in order to cut off the losses just in case a trade goes against you.

The stop loss is set at your most recent swing high or swing low depending on the trend you are trading with. Let’s take for instance, For the downtrend – when the price goes over the 8EMA and then re-crosses back blow the 8EMA, that will be a good place to set your Stop loss (at a Swing high).

You will have to use a 2 lot system for position maintenance. You will then close out one trade position that has made for you +10pips.

For the second position – You will have to remove the trade risk by trailing the stop at +1pip. Then leave the trade to continue working some profits for you at zero risk.

Here are some tools and sites that can be very helpful in answering the homework tasks;

Grammarly
Smallseotools plagiarism checker or Duplichecker
Word count site
Formating your articles : Markdown styling formats
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