It’s difficult to trade with a prop firm. Every little bit matters, the restrictions can be serious, and the pressure is great. Therefore, for many traders who want to overcome difficulties and maintain their funding, scalping on MetaTrader 5 (MT5) has emerged as the greatest option when it comes to techniques. Why? because it is quick, strong, and, when executed properly, quite effective. Naturally, though, it’s not as easy as pressing the buy and sell buttons like you’re in a video game. It involves both science and art.
Therefore, this article will take you through every step of scalping on MT5 under a prop firm account, from the fundamentals to some amazing setups.
What Even Is Scalping, Anyway?
Scalping is all about catching small price moves. We’re talking about entering and exiting trades in minutes or sometimes even seconds. Instead of holding onto a trade for hours or days, scalpers aim to rack up a bunch of small wins that add up over time.
Scalping objectives often range from 5 to 15 pips for each trade. It doesn’t seem like much, does it? However, if you spread those profits across multiple trades within a session, you can leave with a healthy profit without needing to predict the next significant market movement.
Prop trading is a good fit for scalping since it’s quick-paced, allowing for rapid capital development (which is important during assessment phases), and reduces the risk associated with holding positions for extended periods of time.
The problem is that it also calls for accuracy, self-control, and a thorough comprehension of market dynamics. This is more than simply gambling. You’re making little choices that quickly add up.
Why MT5?
Why the MT5 trading platform rather than the more traditional MT4 may be on your mind. In short, MT5 simply adds more to the table. Although prop firms often stay with forex, it provides faster execution, more timeframes, more indicators, and even the option to trade stocks and futures.
Additionally, MT5 features a stronger depth of market (DOM) function and permits partial order filling. For scalpers who need to enter and exit at the best prices, these are invaluable.
Know the Prop Firm Rules (Seriously, Don’t Skip This)
Let’s discuss the rules before moving on to practical methods. Each prop company has its own set of rules. Some don’t permit scalping but others do. While some people don’t mind holding deals overnight, others will charge your account.
Before scalping using your prop account, be sure to verify the following:
- Minimum hold time: Some firms require you to keep trades open for a few minutes to prevent high-frequency trading abuse.
- Daily loss limits: Scalping can involve a lot of trades which means you can hit your daily drawdown faster if you’re not careful.
- Max lot size: Know your limits. Going too heavy too quickly can kill your account.
- News trading: Some firms restrict trading around high-impact news events. You don’t wanna be in a scalp when NFP drops.
Here you need to read the rules. Understand them. Work your strategy within them.
Core Scalping Strategies That Actually Work
Now let’s get to the important part. For prop firm traders, the following tried-and-true scalping techniques are effective on MT5:
The Moving Average Crossover (Fast and Clean)
One of the oldest tricks in the book and it still works.
- Setup: Use a fast MA like 5 or 9 EMA and a slower MA like 20 EMA.
- Entry: When the fast MA crosses above the slow MA, look to buy. When it crosses below, look to sell.
- Exit: Grab 5-10 pips or trail your stop based on momentum.
This one’s great during trending markets. Avoid using it when things are choppy—you’ll get chewed up.
Breakout Scalping (For the Bold)
This one’s for traders who love the rush.
- Setup: Identify tight consolidations or price ranges.
- Entry: Enter as price breaks out of the range. Use pending orders just outside support/resistance.
- Exit: Take profits quickly or move stop to breakeven fast.
Pro tip: Use the MT5 DOM or tick chart to watch momentum. The speed of price movement helps you gauge if the breakout has legs.
The VWAP Bounce (Institutional Favorite)
The Volume Weighted Average Price (VWAP) is used by a lot of institutional traders.
- Setup: Add the VWAP indicator to your intraday chart.
- Entry: Enter on a bounce from VWAP in the direction of the overall trend.
- Exit: Snag your 5-15 pips and move on.
VWAP acts like a magnet during the day. Price tends to revert to it, and smart scalpers use that to their advantage.