First step - Identify the overall trend with whale orders and long-term liquidations: Analyze the whale order and liquidation charts in higher timeframes (such as 15 minutes or 1 hour) to determine the overall trend. For example, if whales are accumulating and buy liquidations are predominant in the 1-hour chart, the overall trend is bullish. This will give you a perspective on the larger context in which your scalping operations will take place.
Second step - Filter signals with RSI and MACD on scalping timeframe (1 minute or 5 minutes): In the scalping chart (1 minute or 5 minutes), look for the following conditions:
When the RSI is below 30 and the MACD Line is below the Signal Line and starts to turn upwards, you may consider a buy operation. This indicates that the asset is oversold and there is a potential shift in momentum upwards.
If the RSI is above 70 and the MACD Line is above the Signal Line and starts to turn downwards, it is a sell signal. This means that the asset is overbought and the price is likely to retrace.
Also look for divergences between price and indicators. For example, if the price is rising but the RSI and/or MACD are showing a bearish divergence, it is a warning signal to avoid long positions and possibly open short positions.
Third step - Confirm with whale orders and liquidations on the scalping chart: In the scalping chart, watch for whale orders or liquidation spikes that support the signals from the indicators. For example:
If you have received a buy signal from the RSI and MACD, and in the scalping chart you see an accumulation of buy whale orders or a buy liquidation spike at that price level, this confirms the signal and increases the likelihood of the price rising.
In the case of a sell signal, look for sell whale orders or sell liquidation spikes to validate the operation.
Fourth step - Establish risk management parameters: Before entering any operation, clearly define your risk management parameters:
Place a stop loss just below the recent support in the case of long operations, or above the recent resistance in the case of short operations.
Set a reasonable profit target. Since scalping is based on capturing small movements, you can set a profit target of 1-2 times the size of the risk you are assuming. For example, if you are willing to risk 10 points in a trade, set a profit target of 20-30 points.
Fifth step - Continuous monitoring and adjustment: During the operation, closely monitor the indicators and the whale order and liquidation charts. If the RSI reaches overbought or oversold levels, or if the MACD shows a divergence with the price, or if you see a sudden change in the flow of whale orders or liquidations, be prepared to close the operation quickly. The market can be volatile and patterns can change in a matter of minutes, so the ability to adapt quickly is crucial for success in scalping.