148# Scalping Strategy: ZLSMA, UT Bot Alerts and Heikin Ashi Candles

Submit by Janus Trader

Scalping Strategy: ZLSMA, UTBot alertssss, and Heikin Ashi Candles is a trend momentum strategy for New York Session.

Setup strategy

Time frame 5 min.

Currency pairs major with USD for example EURUSD, GBPUSD, AUDUSD, Nasdad 100, Gold, BTCUSD.

1. Indicators Setup

1. ZLSMA (Zero-Lag Smoothed Moving Average):

   • Period = 50

   • This moving average will help identify the overall trend, and Heikin Ashi will complement it by visually smoothing the price action.

2. UTBot alertssss:

   • Provides Buy and Sell signals based on trend changes, acting as the trigger for entries and exits.

3. Heikin Ashi Candles:

   • These candlesticks will visually smooth price action, reducing market noise and helping to better identify trends and reversals.

2. Entry Rules

Buy Entry (Long Position):

1. ZLSMA Trend Filter:

   • The price (based on Heikin Ashi candles) must be above the 50-period ZLSMA, indicating an upward trend.

2. UTBot Buy Signal:

   • A Buy Signal from the UTBot alertssss must appear, confirming the trend shift to the upside.

3. Heikin Ashi Confirmation:

   • The current Heikin Ashi candle must be bullish (usually a candle without a lower wick), confirming strength in the upward move.

Sell Entry (Short Position):

1. ZLSMA Trend Filter:

   • The price (based on Heikin Ashi candles) must be below the 50-period ZLSMA, indicating a downward trend.

2. UTBot Sell Signal:

   • A Sell Signal from the UTBot alertssss must appear, confirming the trend shift to the downside.

3. Heikin Ashi Confirmation:

   • The current Heikin Ashi candle must be bearish (usually a candle without an upper wick), confirming strength in the downward move.

4. Profit Target ratio stop loss 1:1.1.

3. Exit Rules

For Long Positions (Buy):

1. UTBot Exit Signal:

   • Exit the trade when UTBot issues a Sell Signal, indicating a potential trend reversal.

2. Heikin Ashi Candle Confirmation:

   • Exit when a bearish Heikin Ashi candle appears (one with a long upper wick or red body), signaling a weakening trend, or when the candle close below the ZLSM line.

3. Stop Loss:

   • Set the stop-loss below the most recent swing low or based on a multiple of the ATR.

4. Profit Target ratio stop loss 1:1.1.

For Short Positions (Sell):

1. UTBot Exit Signal:

   • Exit the trade when UTBot issues a Buy Signal, indicating a potential trend reversal.

2. Heikin Ashi Candle Confirmation:

3. Stop Loss:

   • Set the stop-loss above the most recent swing high or based on a multiple of the ATR.

4. Profit Target ratio stop loss 1:1.1.

4. Trade Management

• Risk Management:

  • Risk no more than 1-2% of your account per trade.

  • Use Heikin Ashi candles in combination with the UTBot alertssss to confirm trends and reversals, which will help you stay in winning trades longer while exiting losing trades quicker.

• Profit Targets:

  • Aim for a risk/reward ratio of 1:1 or more.

  • You can also trail stop-losses manually by following the low of each Heikin Ashi bullish candle for long trades, or the high of each Heikin Ashi bearish candle for short trades.

Advantages of Adding Heikin Ashi Candles:

1. Smoother Price Action:

   • Heikin Ashi candles smooth out small fluctuations, making trends easier to identify. This helps reduce the risk of entering or exiting on false signals often caused by normal candlestick patterns.

2. Better Trend Identification:

   • Heikin Ashi candles show sustained trends more clearly, with bullish candles typically having no lower wicks in an uptrend, and bearish candles having no upper wicks in a downtrend. This will help you stay in trades longer while the trend is strong.

3. Reduced Whipsaw Risk:

   • On lower timeframes like 5 minutes, whipsaw movements (false breakouts) can occur frequently. The Heikin Ashi smoothing effect helps to avoid entering or exiting trades too early by filtering out these short-term price fluctuations.

Final Summary:

• Buy Entry: Price above ZLSMA + UTBot Buy Signal + bullish Heikin Ashi candle (preferably without a lower wick).

• Sell Entry: Price below ZLSMA + UTBot Sell Signal + bearish Heikin Ashi candle (preferably without an upper wick).

• Exit: Exit based on the opposite UTBot signal or the appearance of opposite Heikin Ashi candles.

• Stop Loss: Use the most recent swing high/low or a dynamic stop based on ATR multiples.

• Profit Target: Aim for a risk/reward ratio of 1:2 or trail your stop-loss using

Heikin Ashi candles for better trend-following.

Advantages of Scalping the New York Session with Heikin Ashi, ZLSMA, and UTBot

1. High Volatility: The New York session is one of the most volatile, making it ideal for scalping strategies that rely on quick market moves. Heikin Ashi’s smooth trend indication helps you better manage these fast price shifts.

2. Clearer Trend Following: In fast-moving markets like the New York session, Heikin Ashi candles combined with ZLSMA and UTBot provide clearer trend and momentum signals, allowing you to make more confident and timely decisions.

3. Reduced Noise on Lower Timeframes: Heikin Ashi significantly reduces noise, which is especially beneficial on lower timeframes (like 5 minutes) where price can be choppy. This ensures you’re following real trends instead of reacting to minor fluctuations.

This strategy is an excellent combination for scalping during the New York session, with its focus on reducing noise, managing trends efficiently, and capitalizing on high volatility. 

How to Find an Indicator on TradingView

1. Open TradingView:

   • Go to tradingview.com and either sign in or create an account if you don't have one.

2. Select a Chart:

   • Once logged in, click on the “Chart” tab at the top of the homepage. This will open a chart with default settings.

3. Access the Indicator Menu:

   • On the chart page, look for the “Indicators” button at the top of the screen. It’s represented by a small icon that looks like a bar chart or waves. Click on it to open the indicator library.

4. Search for Indicators:

   • In the indicator search bar, type the name of the indicator you're looking for. For example, if you want to find ZLSMA, type it into the search box.

   • TradingView will show you a list of indicators that match your search.

5. Built-In vs. Custom Indicators:

   • Built-In: These are TradingView’s standard indicators like UT Bot Alerts, ZLSMA , and Moving Averages. They can be found in the "Technical Indicators" tab.

   • Public Library: Custom indicators created by other users. These are found in the "Public Library" section. If you're looking for custom indicators like UTBot Alert, search in this section.

6. Add the Indicator to the Chart:

   • Once you find the indicator, click on it to add it to your chart. It will automatically apply to your active chart.

7. Customize the Indicator Settings:

   • After adding an indicator, you can customize it by hovering over the indicator’s name (usually at the top left of your chart) and clicking the gear icon (Settings). This allows you to adjust inputs, styles, and other parameters.

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