TradingView Indicator for Scalping using Pinescript

The Best TradingView Indicator for Scalping: Achieving a 96.8% Win Rate

Scalping is a popular trading strategy where traders aim to capitalize on small price movements within short timeframes. To achieve success in scalping, traders need tools that are fast, responsive, and precise. One such tool is the combination of Chandelier Exit and Zero Lag SMA (ZLSMA), designed to offer high win rates while minimizing risk. In this article, we’ll break down how this strategy works on TradingView using PineScript, and explain how it can enhance your scalping techniques.

Understanding the Indicator

The indicator we’re discussing combines two powerful tools: Chandelier Exit and Zero Lag SMA (ZLSMA). Together, these indicators help traders identify trends, set stop-loss levels, and capture price moves with high accuracy.

1. Chandelier Exit (Everget):
   • The Chandelier Exit is a volatility-based indicator designed to manage risk. It adjusts stop-loss and take-profit levels dynamically based on market volatility. This prevents premature stop-outs during volatile price movements, allowing traders to stay in trades longer while minimizing risk.
2. Zero Lag SMA (ZLSMA – Veryfid):
   • The ZLSMA is an advanced version of the traditional Simple Moving Average (SMA). Unlike regular SMAs, the ZLSMA minimizes lag by better smoothing out price action. This makes it more responsive to market changes and provides more timely signals for trend-following strategies, making it a crucial tool for scalpers looking for precise entries and exits.

How the Indicator Works on TradingView

The combination of these two indicators works seamlessly on TradingView to offer a scalping strategy with an impressive 96.8% win rate. Let’s break down how it functions on a 5-minute timeframe, which is ideal for scalping, and how you can set it up using PineScript.

Timeframe and Setup

• Timeframe: 5-Minute (5m): Scalping involves quick trades, and the 5-minute chart is perfect for identifying short-term price movements. Using this timeframe allows traders to capitalize on minor price fluctuations, making it suitable for scalping strategies.

Key Components of the Strategy

1. Chandelier Exit (Everget):
   • This indicator sets stop-loss and take-profit levels based on price volatility. It ensures that stop-loss levels adjust according to market conditions, so traders can avoid getting stopped out during normal price fluctuations. It helps traders exit a trade when the price moves significantly against the trend.
2. Zero Lag SMA (ZLSMA – Veryfid):
   • The ZLSMA (represented by the white line) is used to identify the overall market trend. The price must be above the ZLSMA for long positions and below it for short positions. This dynamic moving average helps traders align their trades with the prevailing trend, ensuring they are trading in the right direction.

Long Position (Buy Trade)

To enter a long position using this indicator, follow these steps:

1. Buy Signal:
   • A buy signal is generated when the market shows signs of an upward trend. This can be identified through price action patterns and other indicators used in conjunction with the Chandelier Exit and ZLSMA.
2. Price Action Above the ZLSMA (White Line):
   • The ZLSMA (white line) acts as a dynamic support level. For a long position to be valid, the price action must be above the white line, confirming that the market is in an uptrend. This aligns the trade with the prevailing bullish market trend.
3. Stop Loss Below the Swing Low:
   • The stop loss should be placed just below the most recent swing low. This ensures that if the market moves against the position, losses are minimized. The Chandelier Exit automatically adjusts the stop loss based on market volatility, providing additional protection against sudden market moves.
4. Exit When Price Crosses the White Line:
   • The exit signal is generated when the price crosses below the ZLSMA (white line). This indicates a potential trend reversal or loss of bullish momentum. Traders can close their position when this happens to capture profits before the trend turns.

Short Position (Sell Trade)

For short positions, follow these steps:

1. Sell Signal:
   • A sell signal is triggered when market conditions indicate a downtrend. Similar to long positions, these signals are derived from price action and volatility patterns.
2. Price Action Below the ZLSMA (White Line):
   • For a short trade, the price action needs to be below the ZLSMA (white line), confirming that the market is in a bearish trend. This ensures you are trading in the direction of the downtrend.
3. Stop Loss Above the Swing High:
   • Place the stop loss just above the most recent swing high. This helps protect the trade from large losses if the market reverses. The Chandelier Exit also adjusts the stop loss based on volatility, providing dynamic risk management.
4. Exit When Price Crosses Above the White Line:
   • The exit signal for a short position is when the price crosses above the ZLSMA (white line), signaling a potential reversal in the market trend. Closing the position here helps protect profits before the trend changes direction.

Key Points to Remember

• ZLSMA as Dynamic Support/Resistance: The ZLSMA (white line) serves as a dynamic level of support and resistance, helping traders identify potential entry and exit points.
• Chandelier Exit for Risk Management: The Chandelier Exit adjusts the stop-loss and take-profit levels based on market volatility, offering dynamic risk management. This prevents being stopped out prematurely and maximizes profit potential.
• Trend Following Strategy: This strategy follows the principle of trading in the direction of the trend. The ZLSMA helps you stay on the right side of the market by guiding long and short trades based on price action relative to the moving average.

Why This Indicator Works for Scalping

Scalping requires precision, speed, and effective risk management. The combination of Chandelier Exit and ZLSMA offers all of these features:

• Accuracy: The ZLSMA provides timely signals, reducing lag and helping traders enter and exit at the right moments.
• Risk Management: The Chandelier Exit adjusts stop-loss levels based on volatility, ensuring that trades are protected even in volatile market conditions.
• High Win Rate: With a win rate of 96.8%, this strategy has proven to be highly effective for scalping, helping traders achieve profitable trades in a short time frame.

Conclusion

“The Chandelier Exit combined with the Zero Lag SMA (ZLSMA) is a powerful scalping strategy on TradingView. Using PineScript, traders can easily implement this strategy to identify optimal entry and exit points with a high win rate. By trading in the direction of the trend, managing risk with dynamic stop-loss adjustments, and using timely signals, this strategy can be a valuable tool for anyone looking to improve their scalping results on TradingView. Make sure to test the strategy in a demo account before using it live to fully understand its effectiveness in real market conditions.`

Pinescript Code Of Scalping Indicator :

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Disclaimer
The information provided in this article and any related indicators is for educational purposes only. Trading financial markets involves significant risk, and there is no guarantee of profit. The custom Bollinger Band strategy is based on historical data and technical analysis, which may not accurately forecast future market behavior. Users should conduct their own research, evaluate their risk tolerance, and consult with a licensed financial advisor before making any trading decisions. The author and developer of this indicator are not responsible for any losses incurred through the use of this strategy. Please trade responsibly.