Analyzing a very popular Scalping strategy.

Hello everyone.

Recently I have seen that on YouTube traders that I follow, talk about the same Scalping strategy, as the most amazing thing about this strategy is that with only 2 indicators you can generate a profit of 200%.

So a simple indicator strategy with a totally abysmal profit, of course I would not recommend a strategy with these high returns because I know that these YouTube traders all they are looking for is visits to their videos because that is where their profit comes from.

That is why in this publication I wanted to do a backtesting and test this simple strategy to see if it is true that you can make good returns of 200%.

The setup of this strategy is as follows, We will need:

• 2 EMA

• RSI

• 5 Minute Timing

The setup is also somewhat simple, I will use the ATOM/USDT pair since many at LeoFinance are crazy about the ATOM (including me) so we will use this currency to run the analysis, plus it has had incredible lows and highs lately.

The configuration of these EMA's is: EMA 1 with a 16 period data input and EMA 2 with a 96 period data input. This strategy is for Scalping on a 5 minute time frame, so the periods that the EMAs will measure is somewhat low.

The configuration of the style is a personal decision, I used a thicker line for the EMAs to make them stand out better and flashy colors.

The configuration of the RSI is as follows, the length of the RSI in data entry is 5 minutes to capture more accurately market movements in a small time frame. And also we eliminate the EMA that comes by default in this indicator, and if you want you can put the color you want, but it is advisable that it is a striking one or that is very visible because the RSI is the confirmation of market entry.

Now to take operations we must look for the signals of the indicators, for example:

• LONG.

The first thing is to look for the 16-period EMA to be above the 96-period EMA, if this is met we will only take trades towards LONG.

To enter the market we must be pending when the RSI indicator indicates an oversold area, then when it leaves the oversold area, and a new candle appears is when we will make the entry and open our position.

The profit is to take it when a profit risk benefit of 1:1 is fulfilled, when this is fulfilled we will close our position.

• SHORT.

Now to take a downward signal is to do everything inverted. For example, the first thing is to see that the 16-period EMA is below the 96-period EMA.

Second that the RSI is in an Overbought Zone and has moved out of there, and that will be our entry signal to make a SHORT.

Now, this is the most important part of this publication, as I will do a 1 week backtesting and see what really is the real benefit of implementing this strategy, of course I know that markets vary and if it is from one currency to another even more, even so, I hope to get good results after doing this test.

With the ATOM I obtained incredible results in one week of:

• 64 total.

• 48 winners 75%

• 16 losers 25%.

Which is a marvel of hits in a strategy, since it means a very good profit in the account at the end of the week that compensates very well the losses, if for example we have an initial capital of $100 at the end of a month and strictly implementing this strategy every day we will have made a net profit of approximately $80 which is quite consistent with a win rate of 75% in a single week.

Of course, this was because in the last 7 days the market has been so volatile as to allow that kind of profit, but if we look much further back we might make less profit, That is why a 200% profit is something totally unpredictable in the markets, since situations and prices are different. That is why it is wise to do your own more extensive backtesting.

I understand why this strategy is becoming so popular on the internet and it is because of its high profit at the end of the day or month. Personally I will continue to analyze and use it to see for myself if it continues to be functional over time.

Have you seen this strategy before' what did you think? Let me know in the comments.

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