My Scalping Rulebook: A Focus on RSI and Discipline

Content to Post:

The official Binance prompt asks how we approach scalping, so I want to share my method, which is grounded in using the Relative Strength Index (RSI) and strict discipline.

My Setup & Process:

On a 5-minute chart, I use the RSI indicator to spot potential overbought or oversold conditions. A common setup for me is to look for RSI divergences. For example, if the price makes a new low but the RSI makes a higher low, it’s a bullish divergence. This signals that bearish momentum might be weakening and could be a good entry point for a quick long trade.

My Risk Management:

My risk management is the most important part of my process.

Fixed Position Size: I use the same position size for every scalp to maintain consistency and manage my emotions.

Clear Invalidation: My stop-loss is placed at a point that invalidates the trade idea. For the bullish divergence example, it would go just below the new price low.

Profit Target: I don't get greedy. Scalping is about small wins. I usually set my take-profit at the next level of minor resistance or a 1:2 risk/reward ratio, whichever comes first.

Without these rules, it's easy to let a small loss turn into a big one. What tools do you find most reliable for your #ScalpingStrategy ?

(Disclaimer: This is a personal strategy example for educational purposes and not financial advice. Please do your own research.)