⚠ Smart Money Concepts ⚠ Crypto Scalping Trading Strategy That Works
This is a strategy that Im testing out myself currently, but I thought I would share it with you guys, get your thoughts and opinions on it and let me know if you have tested this or are looking to test such a strategy out as I get into This video, if you find it useful and informative hit the like button, do appreciate that if you are new to the channel, go ahead and subscribe tap, the Bell select all the notifications, and in doing so you will be kept up to date with absolutely everything that We do here at cheeky, crypto and with all that said, done and out of the way lets go ahead and actually jump down into the desktop and talk about this five minute. Scalping strategy, okay, so the first thing we need to do is obviously go into trading view. If you havent got a trading view account you can get. One for free link is in the description down below. There are some paid options, depending on the number of indicators that you want, but a free account works for most people. And so, if you havent already got one of these check out the link in the description below and if you do use the link in it below, you will also be supporting the channel. Okay lets uh lets dive into this. Well assume that youve already got an account and, in this particular example, were actually on polygons Matic and were paired up with usdt.
This is the five minute chart right. This is where we want to start so this strategy it works best when were on a five minute time frame. Okay, so what were going to do is the first thing were going to do, is go over to the indicators Tab and were going to search for the smart money concepts by Lux algo this one just here. Okay, so were going to load that into the charts and were going to end up with a load of different things. Here, lets just walk through this right and theres. A couple of things here that are really important so were going to dive into a few of these to start with right, theres a lot of Dash lines on here. We dont need to change any settings, its kind of already good to go. So the first thing we need to talk about is this one here. This is a change of structure, uh, indication right. This basically just tells us that weve gone down lower okay, this particular candle over this side here broke past this low point. This is a change of character. Right were looking pretty good were moving on up. We had a change of structure here in green, basically looking bullish, and this one here is bearish right. This is a bearish signal, change of character, a change of Direction, so the trend potentially has changed. Okay, thats, what that ones telling you and its an important one.
So we have to burrow that in mind and the second that we come back down lower than this break of structure. Here we can see that we get another one over this side. We can see this particular candle. This then changes from a change of character to a break of structure. Okay were continuing. This move to the downside, so just bear that in mind. Uh change, your character is the first indication everything after that is a break of structure and will continue to break down. Okay, so you can see this change of character happens up here and we broke all the way down to this low Point. Okay, now on this journey, youll also find theres a bullish one. Here we broke up higher than this local high and we know we got a change of character to the outside. We also got a break of structure up here as well. Weve come back down. Weve got a break of a change of character as we come back down lower than this low point, and now weve got a in the last five minutes here: a break of structure. Okay, so essentially these things are telling you uh the kind of the macro direction of the market and you can kind of go through and you can kind of see where all these things are: okay, so thats kind of the first one they can also get indicated. Um, you know equal highs, equal lows and stuff like that as well.
They can also come up here and then you get these uh. These kind of rectangular boxes right, youve, got blue ones, youve got red ones, and these are basically a couple of things you can perceive these in many different ways: fair value gaps. You could look at them as support and resistance, and you can look at these as supply and demand theyre all relatively similar, and they are kind of act in a very similar way and so thats kind of where we steer with it right, and so this is The first indicator that you need: okay, is it kind of gives you a lot? You dont have to draw much on the chart its kind of already there and gives you a good starting position. The next thing that we need to do is we need to have some filters. Okay, so we need to be able to ascertain whether or not we want to take a long position or whether we want to take a short position. Okay, and to do that, the first thing that we want to do is come back to the indicators and what were going to do is were going to go. Ema were going to find the moving average exponential were going to put that on the chart. We get this blue line were going to come into the settings on the EMA and were going to change this into a 200 EMA. Okay, and were going to come over to the style, were going to make it white and Im going to make it slightly bigger.
So I can see it a little bit easier and Im going to click. Ok, perfect! So here we have the 200 EMA. Now the 200 EMA for most people is a trend indication. It shows you whether you should be bullish or whether you should be bearish right, and so the reason that youd have this on the chart is to help us make more informed decisions over what we are going to trade, for example. This does repaint, as you just saw here, it removed this particular area right. So youve got to be aware that this this Lux algo, smart money concept, is a great indicator, but it will repaint on you, so do have to watch out a couple of times. Okay and the EMA helps us understand whether or not we want to be bullish or bearish right. So right now when were above the 200 EMA, you really only want to be taking long positions and when youre below the um, the 200 EMA, you only really want to take short position so thats, the first kind of filter that were going to help with this Particular strategy, so the next indicator that we need is going to be the um. They call it volume spread by for VRA right. So, if I type in here volume spread for VSA, you can see it right there. We go ahead and click that in, and we end up with this down here, Im going to actually close off the stochastic rsis, because we dont need that uh here so Im just going to collapse that one thats the wrong one Im going to collapse this one Down there we go and get rid of that for a second okay.
So these are the indicators that we need. Okay, so heres three different things that are going on: okay, so lets go ahead and walk into the strategy and what were looking for here in terms of making this five minute scapping strategy really effective. Okay, so lets talk about the short position. Ive gone back in time on polygons Matic, to give a really good example as to what were looking for with this particular strategy. Okay, so here we can see that were kind of wedged up in a bit of a ranging Market, were kind of going uh between these demand areas down here and the supply areas at the top were just kind of trading sideways and were really bouncing around our 200 EMA, we can see theres a lot of volume in the market as well a market that is very much undecided. So as I go through and I I play the next can of candles, we can kind of see that were getting rejected here. From this 200 EMA, so as we kind of play this through here, we get this first change of character, indication okay, so this particular candle could be a really interesting point for us to think about changes that are occurring here now, one of the things that we Need to be looking out for is a new value, a fair value gap or kind of resistance and Supply Zone to be appearing up in this area as well were also looking for, yellow or red volume down the bottom here, with this being green.
At the moment, this is not ideal for an entry one more candle and see if we get confirmation here we go so this particular candle is where we would enter. Okay. Weve got a couple of things here that are happening. One weve got the change of character. Signal from Lux algo thats, looking great up here, we have our new area of Supply coming in pushing the market down and at the bottom we have a yellow volume in our indicator. This is the ideal setup for a short position. Okay, so well go ahead and well go ahead and put our short position right here. Our stop loss would go above this area just at the top here, and this would basically be our supply zone. So well put our stop loss, just above that and were going to be targeting out Risk Road ratio of 1.5. Okay, some people might have higher risk reward ratios in terms of what theyre theyre winning for Im going to go for 1.5. Just to keep this really profitable, um, but yet manageable at the same time. So as I go ahead and I play these candles in, we can see that we come right down into here. We can see. This is a weak low Point. Thats also indicated – and we have another break of structure down here, so things are looking pretty good at this particular Point. As we go down there, we go weve, absolutely nailed the profit we come down.
You can see that we Wicked up so really really straightforward and when you have the right criteria now, these are actually quite difficult to find perfect setups, which is why I went all the way back here to pretty much the 1st of November 2022 and you dont Need many of these really good setups to be profitable if youre, using leverage, for example, and on that note, I think its probably worth noting that we are actually offering our cheeky community and some fantastic deals with bitget and buy bit in the description down below with A bit get you I get up to eight thousand dollars in bonuses for using their platform link is in the description below by using that link. You are, of course, helping support the channel as well, so why not go ahead and check that out and if youre looking at buy bit also depending on your preferences, they also have some fantastic bonuses up for grabs for The Cheeky Community as well. So do check those out in the description now when you have high leverage positions and ideal setups like this, with really good risk reward ratios, you could start to see some very significant gains in your portfolio now, one of the things that we want to kind of Talk about in terms of the shorting of the market here is not to get too greedy. Yes, you could have made some additional funds here, if you maybe did a trailing stop or something to that effect.
These are slightly more complex kind of subjects to talk about, but again there are other other ways that you can kind of: take a risk reward ratio and make it work for you. For example, you can kind of Trail this down as you hit the 1.5. Maybe you put it to neutral at an entry point, then maybe it comes down a little bit lower. Then you kind of move that stop loss ever so slightly and you keep laddering it in okay. But the idea here is not to get too greedy thats, usually how things end up really really bad. So if youre going to use leverage and things like that and youre not familiar with it, its high risk, I think its worth noting that it is incredibly high risk. It multiplies your gains but multiplies your losses at the same time. So, if youre going to do anything with leverage, do some research on it first do not just go full Degen into that um and also just bear in mind if youre going to start out. There are some fantastic benefits you get with um bitget here you can actually come over to their Futures and there is a demo trading area. So you can sign up. You can actually practice the strategy using the demo area, um and you know, risk no, no funds or whatsoever, so you can get used to the ideas of how these things work before you actually do it with real money.
And, of course, you know do your back testing as well. Like I said, I only just started to look at this strategy and so theres a lot of things. Even I am still looking at and the ideal setups are fantastic and its almost better to wait for the ideal setup than it is to kind of just go for d gen and just every single one. You see go for it because you are going to find that theres a win loss ratio and its not going to be 100, so you do have to take some Ls at times and to take the wins when you get them so given good risk management having Good risk reward ratios are absolutely critical to a strategy like this okay, so lets go ahead and move on into understanding the long. A variation of this particular strategy. Okay, so lets talk about the setup for a long position. Here we have Matic in this kind of upward Trend were above the uh 200 EMA. Here we can see that we also touched on this previous area of demand at the bottom and were moving up right. So what were going to do is were going to move ahead a couple of candles here we do want to be a little bit cautious on this kind of setup, though, just bear in mind that we have got these red areas here. This would be Supply trying to push the price down, and so there does seem to be a fair amount.
Stacked here so well be a little bit cautious. But what well do is well watch for a change of character and well see how things progress. So, as we kind of move into this, we can see theres a bit of red and then we continue. We have this big move to the upside. Now this move to the upside gives us a clear glimpse into this area of resistance. We can see that we would have hit a lot of um setting pressure within here, but we are actually wicking slightly higher, so this will give me a little bit of room for encouragement. I think that this is an area that we might be able to actually break our way through it, and so, as we kind of continue here there we go, we can see that weve got a change of character. We hit this additional area, we Wicked into it, and we have a change of character now. We have also got this area down at the bottom here, which is our new um, fair value Gap or supply and demand resistance and support area. Okay. So this blue one just here and we also have some increase – a dramatic increase in volume. So this is actually a really good area to be thinking about Ill, be a little bit cautious around this area here, but I probably would want to take this trade okay. So Id go in with my long position. Id take a look at it here.
I put my stop loss down at this low point just below this recent local low or swing low, as they call it and well be looking for a risk to reward ratio of 1.5 okay, so this will actually be a pretty profitable trade specifically, if were using Leverage on bitget or buy bit, for example, so I come across here. We would have activated it at this particular Point. Okay, and so what were going to do is were going to play this through and see if we can break this area of resistance right. So, as we kind of progress in here, we have a little bit of downward move but were still pushing right back up into that area of resistance. So a little bit of volatility and Bam there we go. We have a really strong high point. We have a big change of character here as well, so this is a really good point. We could also look at this if we werent sure about this entry down here, we could have also have waited for this a break of structure. This would be a really strong indication of things to come. We entered a little bit sooner down here and but you could have also waited for this confirmation of this one. We are progressing quite nicely. Lets go ahead and move on to the next candle and Bam weve taken profit. So straight off the bat here we can see that theres, a nice quick, easy five minute, scalp a little bit a risk associated with the initial entry that we had down here.
But if we had actually waited, we can go ahead and just do an entry on that as well. So, if wed waited for this confirmation, we would have CL we would have entered in on here. Our stop loss still would have been down here, which means our risk. Reward ratio would still be 1.5. Wed have to go up significantly higher, so lets go ahead and play a few additional candles and see where they go were still moving up. Uh its a weak high. This point, though, were still progressing. Lets, see how we go. Okay were breaking through, things are moving quite nicely here. Lets go ahead and just add a few more in and see were progressing really really well for this. So, even if we had waited there, you go, we would have hit profit at that particular point right there, okay, so essentially it we have two options with this right. We could have taken the slightly riskier earlier entry, which is where I went in, or we could have waited for that confirmation, but you can kind of see if it were above. The T 200 EMA weve got really good volume coming in and we had the change of character. This is an ideal setup for this particular type of trading strategy. Okay, so at this point I want to talk about some weak signals that we want to ignore, and this is why we have the volume analysis at the bottom here.
Okay, so lets actually go pay attention to this particular area. Here right, we had a change of character here and we may have wanted to have gone short, except our volume indicator is not giving us the right signal, its not great its, not yellow, and it is not red at this particular point. So therefore, we would not have wanted to have entered into that one. Okay, we can also see up here. We also had a change of character at this point here now this would have been yellow okay, so this would have been an ideal point to think. Maybe we could enter into a trade, and at that point we would also note that you know well be looking for our stop loss to kind of be below the swing low, which would have been around here and well be looking for that 1.5. Now we can see quite clearly that this broke down and failed to actually play out. This is an indication of a couple of things, one all of these algorithmic um kind of uh indicators. They dont always play out right. You cannot expect a 100 win rate, even when you have good setups that, like this theres, only so much that you can filter out. So at some point you are going to have to take some Ls thats. Okay, the idea here is that we win more than we lose and we grow an account over time. Okay, so just wanted to be aware of that.
I wanted to kind of show you these kind of setups in here theres also a couple over this side as well. We have a change of character here and if we had gone into this one, let me go ahead and grab my long position here. Okay, we would have entered in here on this yellow volume. Okay, so we would have entered right about here and we would have pulled this. Stop loss down to this low point and our win risk reward ratio would be 1 to 1.5 and we pull this across. You can see that it doesnt get hit for a very, very long period of time. It does eventually get there, but we are in this trade for a very long period of time. This is also something that you can experience within this space and with this particular strategy, you can see that we stayed in profit pretty much from the majority of it, but we had better entries over this side as well, and so sometimes its good to kind of Have patience let these things run their course. Do not Chop and change. Do not kind of go in and then move your stop loss and move your entry or move your TPS and stuff like that. Like have a strategy and stick to the strategy, thats kind of the big takeaway that Ive had from this when Ive been experimenting around with it. So I did want to kind of go through a couple of less than ideal setups and some that dont play out.
Such as the one thats over on this side here and the ones that take a long time to actually play out right there, the time period on that would have been. Let me find where you entered, we would have entered uh. Where was it, it was going to be around around here. I think wasnt it yeah. It was this uh, this particular candle, so we entered here um we didnt, actually reach take profit until up here, so it would have taken uh 10 hours to play out right, which for some might be okay, um. So its have a plan, stick to it and execute it. Not all trades will be winners, obviously, and but you do look for the most ideal setups, where possible, no trade, it isnt necessarily a bad thing. Sometimes, no trade is a good trade right, sometimes its good. Not to be in the market and wait for the ideal setups to present themselves, and once you actually have those those are the ones that are incredibly profitable. At the end of the day, we its about making profit its about making as much money as you can, on your account, not always youre, not always going to win um, sometimes youre going to lose, but making sure that you win more than you lose is going To be absolutely critical in how these particular strategy G plays out so make sure you pick and choose the ones that work for you make sure that youre using these filters to their advantage.
If you havent got yellow or red volume, then dont bother actually entering into a trade. Make sure that if youre going long, youre above the 200 EMA, if youre going short, make sure youre below the 200 EMA make sure that things are stacked in your favor. And I think this strategy should hopefully pay dividends, so hopefully you have enjoyed this video slightly different than normal. If you have hit the like button, I do appreciate that if you are looking at maybe trying this strategy out, I do urge you guys to practice it before actually using real funds on it.