To successfully execute scalping, the following process must be strictly followed:

1. Choose the trading instrument and time frame

Instrument: Prioritize instruments with high liquidity and low spreads (such as EUR/USD and GBP/USD in forex; S&P 500 mini contracts in futures; and large-cap stocks in equities).

Time frame: Commonly used are 1 minute (M1) and 5 minutes (M5) candlesticks, and some strategies even use Tick charts (tick-by-tick transaction data).

Set trading signals

Common entry signals include:

Technical indicator breakout: For example, the M5 moving average crosses above the M10 moving average (golden cross), or the RSI rebounds from the oversold zone (<30) to above 50.

Key price level trigger: The price quickly rebounds after touching previous highs/lows or Fibonacci retracement levels (such as 38.2%).

Volume anomaly: A sudden increase in trading volume over a short period, accompanied by rapid price fluctuations (may indicate the start of a short-term trend).

Strict stop-loss and take-profit

Stop-loss: Set a very small stop-loss (usually 1-3 points) to avoid enlarging single trade losses. For example, when going long on EUR/USD, set the stop-loss 0.5-1 point below the current price.

Take-profit: Target profit is usually 1-5 points (depending on the instrument's volatility), and close the position immediately once achieved. Some strategies use a 'trailing stop,' which means that the stop-loss is gradually moved up to protect profits as the price moves in a favorable direction.

4. Control trading frequency and position size

Frequency: Adjust the number of trades per day based on market volatility (e.g., increase trades in a ranging market, decrease in a trending market).

Position size: The position size for each trade must be strictly controlled (usually 0.1%-0.5% of total capital) to avoid a single loss affecting the overall account.