Price Dip Scalping
Table of Contents
Definition
During strong bullish trends or bearish trends, the chart have always a set back before continuing the trend direction. By identifying these setback on a small time fram (1 - 5 minutes), user can identify good buying points for scalping trades.
Usage
To identify general trend of a security chart, we use a MA with large smoothing value (for example 50).
For identifying short dips in a bullish trend, we use a medium term MA and a short term MA. When the short Term MA crosses Medium Term MA downwards and then subsequently upwards, then a dip is persent. A dip is confirmed if the overall trend line is bullish.
To identify Dips in a bearish trend, the faster MA should cross above the medium MA and then subsequently below it. If the overall Trend is bearish, then a dip is confirmed.
To collect proifts, a TP should be reasonably set up (typical value 5%). To protect against unepected market movements, a SL of 10% can be applied.
PineScript
Short dip in an overall bullish trend
//@version=5strategy("Buy on Small Dip in Bullish Trend", overlay=true) // --- Input Parameters for MA Lengths ---// Input for the length of the short Moving Average (e.g., for quick movements/dips)shortMaLength = input.int(10, "Short MA Length", minval=1) // Input for the length of the medium Moving Average (e.g., for intermediate movements/dips)mediumMaLength = input.int(50, "Medium MA Length", minval=1) // Input for the length of the long Moving Average (e.g., for main trend identification)longMaLength = input.int(200, "Long MA Length", minval=1) // --- Risk Management Parameters ---// Stop loss set to 10% as requestedstopLossPercent = input.float(10.0, "Stop Loss %", minval=0.1, step=0.1) / 100// Take profit set to 3% as requestedtakeProfitPercent = input.float(3.0, "Take Profit %", minval=0.1, step=0.1) / 100 // --- Moving Average Calculations ---// Calculate the short-period Simple Moving Average of the closing priceshortMa = ta.sma(close, shortMaLength) // Calculate the medium-period Simple Moving Average of the closing pricemediumMa = ta.sma(close, mediumMaLength) // Calculate the long-period Simple Moving Average of the closing pricelongMa = ta.sma(close, longMaLength) // --- Trend and Dip Conditions ---// Condition for a long-term bullish trend:// Current price is above the long-term MA, and the long-term MA itself is sloping upwards.isBullishTrend = close > longMa and longMa > longMa[1] // Condition for a small dip:// The short MA crosses below the medium MA (indicating a dip starts),// AND then the short MA crosses back above the medium MA (indicating the dip ends and uptrend resumes).// We use `ta.crossunder` to detect the dip initiation and `ta.crossover` for the dip recovery.dipInitiated = ta.crossunder(shortMa, mediumMa)dipRecovered = ta.crossover(shortMa, mediumMa) // A buy signal is generated when the dip recovers AND the overall trend is bullish.buySignal = dipRecovered and isBullishTrend // --- Entry Logic ---// Enter a long position when the buy signal is trueif buySignal strategy.entry("BuyDip", strategy.long) // --- Exit Logic (Stop Loss and Take Profit) ---// Calculate stop loss and take profit prices based on entry pricelongStopPrice = strategy.position_avg_price * (1 - stopLossPercent)longTakeProfitPrice = strategy.position_avg_price * (1 + takeProfitPercent) // Apply stop loss and take profit orders for the "BuyDip" entrystrategy.exit("Exit", from_entry="BuyDip", stop=longStopPrice, limit=longTakeProfitPrice) // --- Plotting Moving Averages ---// Plot the short MA on the chart (e.g., green for faster movement)plot(shortMa, "Short MA", color=color.green, linewidth=2) // Plot the medium MA on the chart (e.g., orange for intermediate movement)plot(mediumMa, "Medium MA", color=color.orange, linewidth=2) // Plot the long MA on the chart (e.g., blue for main trend)plot(longMa, "Long MA", color=color.blue, linewidth=3)
Short dip in an overall bearish trend
//@version=5strategy("Sell on Small Upwards Flip in Bearish Trend", overlay=true) // --- Input Parameters for MA Lengths ---// Input for the length of the short Moving Average (e.g., for quick movements/flips)shortMaLength = input.int(10, "Short MA Length", minval=1) // Input for the length of the medium Moving Average (e.g., for intermediate movements/flips)mediumMaLength = input.int(50, "Medium MA Length", minval=1) // Input for the length of the long Moving Average (e.g., for main trend identification)longMaLength = input.int(200, "Long MA Length", minval=1) // --- Risk Management Parameters ---// Stop loss set to 10% for short positions (above entry price)stopLossPercent = input.float(10.0, "Stop Loss %", minval=0.1, step=0.1) / 100// Take profit set to 3% for short positions (below entry price)takeProfitPercent = input.float(3.0, "Take Profit %", minval=0.1, step=0.1) / 100 // --- Moving Average Calculations ---// Calculate the short-period Simple Moving Average of the closing priceshortMa = ta.sma(close, shortMaLength) // Calculate the medium-period Simple Moving Average of the closing pricemediumMa = ta.sma(close, mediumMaLength) // Calculate the long-period Simple Moving Average of the closing pricelongMa = ta.sma(close, longMaLength) // --- Trend and Flip Conditions ---// Condition for a long-term bearish trend:// Current price is below the long-term MA, and the long-term MA itself is sloping downwards.isBearishTrend = close < longMa and longMa < longMa[1] // Condition for a small upwards flip:// The short MA crosses above the medium MA (indicating a flip starts),// AND then the short MA crosses back below the medium MA (indicating the flip ends and downtrend resumes).flipInitiated = ta.crossover(shortMa, mediumMa)flipRecovered = ta.crossunder(shortMa, mediumMa) // A sell signal is generated when the flip recovers AND the overall trend is bearish.sellSignal = flipRecovered and isBearishTrend // --- Entry Logic ---// Enter a short position when the sell signal is trueif sellSignal strategy.entry("SellFlip", strategy.short) // --- Exit Logic (Stop Loss and Take Profit) ---// Calculate stop loss and take profit prices based on entry price for a short position// Stop loss is above entry price for a shortlongStopPrice = strategy.position_avg_price * (1 + stopLossPercent)// Take profit is below entry price for a shortlongTakeProfitPrice = strategy.position_avg_price * (1 - takeProfitPercent) // Apply stop loss and take profit orders for the "SellFlip" entrystrategy.exit("Exit", from_entry="SellFlip", stop=longStopPrice, limit=longTakeProfitPrice) // --- Plotting Moving Averages ---// Plot the short MA on the chart (e.g., green for faster movement)plot(shortMa, "Short MA", color=color.green, linewidth=2) // Plot the medium MA on the chart (e.g., orange for intermediate movement)plot(mediumMa, "Medium MA", color=color.orange, linewidth=2) // Plot the long MA on the chart (e.g., blue for main trend)plot(longMa, "Long MA", color=color.blue, linewidth=3)
ThinkScript
Short dip in an overall bullish trend
# Strategy "Buy on Small Dip in Bullish Trend"## This ThinkScript indicator visualizes the strategy by plotting the moving# averages and marking potential entry and exit points with bubbles.# It does not execute trades, but shows where they would occur.# declare upper; # --- Input Parameters ---# Input for the length of the short Moving Averageinput shortMaLength = 10;# Input for the length of the medium Moving Averageinput mediumMaLength = 50;# Input for the length of the long Moving Averageinput longMaLength = 200; # Risk Management Parametersinput stopLossPercent = 10.0; # Stop loss in percentinput takeProfitPercent = 3.0; # Take profit in percent # --- Moving Average Calculations ---def shortMa = SimpleMovingAvg(close, shortMaLength);def mediumMa = SimpleMovingAvg(close, mediumMaLength);def longMa = SimpleMovingAvg(close, longMaLength); # --- Trend and Dip Conditions ---# Condition for a long-term bullish trend:# Current price is above the long-term MA, and the long-term MA itself is sloping upwards.def isBullishTrend = close > longMa and longMa > longMa[1]; # Condition for a small dip:# The short MA crosses below the medium MA (dip initiated) and then# the short MA crosses back above the medium MA (dip recovered).def dipInitiated = shortMa[1] > mediumMa[1] and shortMa <= mediumMa;def dipRecovered = shortMa[1] <= mediumMa[1] and shortMa > mediumMa; # A buy signal is generated when the dip recovers AND the overall trend is bullish.def buySignal = dipRecovered and isBullishTrend; # --- Entry and Exit Logic Visualization ---# We'll use persistent variables to track the state of a potential trade.# 'isPositionOpen' will track if a trade has been entered and not yet exited.def isPositionOpen = if buySignal then yes else if isPositionOpen[1] and (low < longStopPrice[1] or high > longTakeProfitPrice[1]) then no else isPositionOpen[1]; # 'entryPrice' will store the closing price of the bar where the buy signal was generated.def entryPrice = if buySignal then close else entryPrice[1]; # --- Exit Price Calculations ---# Calculate stop loss and take profit prices based on the entry price.def longStopPrice = entryPrice * (1 - stopLossPercent / 100);def longTakeProfitPrice = entryPrice * (1 + takeProfitPercent / 100); # --- Plotting ---# Plot the three moving averages with distinct colors and line styles.plot ShortMA = shortMa;ShortMA.SetDefaultColor(Color.GREEN);ShortMA.SetLineWeight(2); plot MediumMA = mediumMa;MediumMA.SetDefaultColor(Color.ORANGE);MediumMA.SetLineWeight(2); plot LongMA = longMa;LongMA.SetDefaultColor(Color.BLUE);LongMA.SetLineWeight(3); # Plot the Stop Loss and Take Profit lines only when a position is "open".plot StopLoss = if isPositionOpen then longStopPrice else Double.NaN;StopLoss.SetDefaultColor(Color.RED);StopLoss.SetStyle(Curve.SHORT_DASH);StopLoss.HideBubble();StopLoss.SetLineWeight(1); plot TakeProfit = if isPositionOpen then longTakeProfitPrice else Double.NaN;TakeProfit.SetDefaultColor(Color.GREEN);TakeProfit.SetStyle(Curve.SHORT_DASH);TakeProfit.HideBubble();TakeProfit.SetLineWeight(1); # Add chart bubbles to mark entry and exit points.AddChartBubble(buySignal, high, "Buy Dip", Color.GREEN, yes);AddChartBubble(isPositionOpen[1] and (low < longStopPrice[1] or high > longTakeProfitPrice[1]), low, "Exit", Color.GRAY, no);
Short dip in an overall bearish trend
#Strategy "Sell on Small Upwards Flip in Bearish Trend"## This ThinkScript indicator visualizes the strategy by plotting the moving# averages and marking potential entry and exit points with bubbles.# It does not execute trades, but shows where they would occur.# declare upper; # --- Input Parameters ---# Input for the length of the short Moving Averageinput shortMaLength = 10;# Input for the length of the medium Moving Averageinput mediumMaLength = 50;# Input for the length of the long Moving Averageinput longMaLength = 200; # Risk Management Parameters for a short positioninput stopLossPercent = 10.0; # Stop loss in percent (above entry)input takeProfitPercent = 3.0; # Take profit in percent (below entry) # --- Moving Average Calculations ---def shortMa = SimpleMovingAvg(close, shortMaLength);def mediumMa = SimpleMovingAvg(close, mediumMaLength);def longMa = SimpleMovingAvg(close, longMaLength); # --- Trend and Flip Conditions ---# Condition for a long-term bearish trend:# Current price is below the long-term MA, and the long-term MA itself is sloping downwards.def isBearishTrend = close < longMa and longMa < longMa[1]; # Condition for a small upwards flip:# The short MA crosses above the medium MA (flip initiated) and then# the short MA crosses back below the medium MA (flip recovered).def flipInitiated = shortMa[1] <= mediumMa[1] and shortMa > mediumMa;def flipRecovered = shortMa[1] > mediumMa[1] and shortMa <= mediumMa; # A sell signal is generated when the flip recovers AND the overall trend is bearish.def sellSignal = flipRecovered and isBearishTrend; # --- Entry and Exit Logic Visualization ---# We'll use persistent variables to track the state of a potential trade.# 'isPositionOpen' will track if a trade has been entered and not yet exited.def isPositionOpen = if sellSignal then yes else if isPositionOpen[1] and (high > shortStopPrice[1] or low < shortTakeProfitPrice[1]) then no else isPositionOpen[1]; # 'entryPrice' will store the closing price of the bar where the sell signal was generated.def entryPrice = if sellSignal then close else entryPrice[1]; # --- Exit Price Calculations for a Short Position ---# Calculate stop loss and take profit prices based on the entry price.# For a short, stop loss is above entry, take profit is below entry.def shortStopPrice = entryPrice * (1 + stopLossPercent / 100);def shortTakeProfitPrice = entryPrice * (1 - takeProfitPercent / 100); # --- Plotting ---# Plot the three moving averages with distinct colors and line styles.plot ShortMA = shortMa;ShortMA.SetDefaultColor(Color.GREEN);ShortMA.SetLineWeight(2); plot MediumMA = mediumMa;MediumMA.SetDefaultColor(Color.ORANGE);MediumMA.SetLineWeight(2); plot LongMA = longMa;LongMA.SetDefaultColor(Color.BLUE);LongMA.SetLineWeight(3); # Plot the Stop Loss and Take Profit lines only when a position is "open".plot StopLoss = if isPositionOpen then shortStopPrice else Double.NaN;StopLoss.SetDefaultColor(Color.RED);StopLoss.SetStyle(Curve.SHORT_DASH);StopLoss.HideBubble();StopLoss.SetLineWeight(1); plot TakeProfit = if isPositionOpen then shortTakeProfitPrice else Double.NaN;TakeProfit.SetDefaultColor(Color.GREEN);TakeProfit.SetStyle(Curve.SHORT_DASH);TakeProfit.HideBubble();TakeProfit.SetLineWeight(1); # Add chart bubbles to mark entry and exit points.AddChartBubble(sellSignal, low, "Sell Flip", Color.RED, yes);AddChartBubble(isPositionOpen[1] and (high > shortStopPrice[1] or low < shortTakeProfitPrice[1]), high, "Exit", Color.GRAY, no);