Traders employ a variety of strategies in order to be able to consistently beat the markets and profit – however, there are few methods of trading as effective as scalping. Scalping refers to a form of trading that relies on making a series of small profitable trades, focussing on quantity rather than quality in order to boost profits. The primary focus of such strategies is to utilise trading volumes rather than performing a lot of complex technical analysis. There are several such trading strategies, and one of them has been discussed in this article. Read on to find out more.

## Indicators Explained

There are 2 main indicators used in this trading setup, and each of these indicators has been explained below in detail.

### Fibonacci Retracement

The Fibonacci Retracement levels are lines that are drawn on a particular chart so as to try and predict where the support and resistance levels are likely to occur. The levels are based on the Fibonacci sequence and can be used to identify entry and exit points for a trade. There are several Fibonacci levels that are used, but for the purposes of this strategy, we shall mainly be using them to calculate our take profit and stop-loss levels.

### AB=CD Pattern

An AB=CD pattern consists of 4 legs, each of which is represented by a letter of the alphabet. For example, in a market, the price goes up from A to B, after which it falls down sharply to C, and then begins going up again to reach point D. if the AB=CD pattern held true, then the length of the AB and CD lines would be relatively the same, the time period over which they are spread would be the same, and the retracements would be based on the Fibonacci levels. In this case, you could either go short after point D, or go long after point C reverses. The opposite AB=CD pattern is also quite common in the markets and can be observed.

## Results

### Initial Results

After the strategy was tested on past data, the overall results were:

Profitability: 506.97% net profit