The more experience you gain in Forex trading, the more you get behind the importance of a good strategy.
There are many Forex strategies that traders can choose from, but in this article we learn and discover a
Forex scalping strategy. We will take a brief look at what is involved in scaling rates and discuss some of
the best tips and tricks for the beginning Forex scalper. Also read: Best scalping strategy Forex trading.
When we talk about Forex, scalps refers to making a large amount of trades that individually yield small
profits.
With a scalping strategy, traders generally assume an expected profit of between 5 and 10 pips per trade.
In addition, traders can use a high leverage to increase these profits. Let it be clear that the lever can also
increase any losses.
What is the best scalp strategy? Determining whether a Forex scalping strategy is appropriate will largely depend on the amount of time you are
willing to invest in scalp trading. The scaling of the Forex market requires constant analysis, attention, and placing
multiple orders, which can take a long time.The next important point is that you have the qualities to make decisions
in the blink of an eye. To scalpe well you have to quickly predict where the market is going. Then you trade to this by
opening and closing positions within a few seconds. That does not make Forex scalping easy.When you have started
using scalps, first practice with a demo account. Start with trading in general, try different strategies and make market
forecasts.
When making predictions, keep in mind that psychology, and especially herd behavior, is an important part
of market movements. Insight into this are important characteristics of the Forex scalper.If you are interested in
practicing scalping strategies, then you should also be willing to accept losses. Your goal as a scalper is to trade more
profitable than loss-making positions. Make sure you know when to close positions if they are not successful.
1 minute Forex Scalping strategy
As discussed earlier, the underlying idea behind scalping is to open a large number of trades and then close them
again within a few seconds or minutes.
The well-known trader Paul Rotter simultaneously placed buy and sell orders and then used specific events in the
order book to make short-term trade decisions. Rotter traded around 1 million contracts per day and thus created a
legendary reputation within certain circles. His successes and techniques have inspired many others.
Although studying well-known Forex scalpers can be very practical, it is wise not to adopt strategies directly, but
rather to use them for your personal unique design. An example of a scalping strategy is the 1 minute
Forex Scalping Strategy, a simple strategy for the novice scalper.
How does 1 minute scalping work?
For beginners, set the time unit of your graph to 1 minute and make sure that the following two standard
MetaTrader 4 indicators are on the graph:
1. Exponential Moving Average (EMA) with periods of 100 and 50
2. Stochastic with periods 5, 3 and 3.
Tip: you can give the EMA lines different colors to distinguish them easily.
Now you have turned on the indicators and the graph looks clear.
Now let's look at the required signals for opening long and short positions according to this simple Forex
scalping technique.
Long orders
1. Be ready to open a long order when the 50 EMA indicator is above the 100 EMA indicator.
2. If the stochastic is over 20, the price is close to the crossroads of the EMA indicator and that corresponds
to the price you had in mind, then you open the lung position.
Short orders
1. To determine when to place a short order, use the same indicators as for the long position, but reversed.
2. When the 50 EMA indicator is below the 100 EMA indicator, the course is close to these lines and the
stochastics are below 80, then open a short position.
You can use this Forex scalping strategy for all currency pairs, however it is easier to apply this strategy to
major currency pairs because they will have the best spreads.
This approach is likely to be most effective during high-volatility trading sessions, which will usually be around
New York closing and London opening.
We are now discussing a number of scalping techniques that can help us with this Forex scalping strategy, and
scalping in general.
Forex scalping techniques
There is a technique where you compare the primary time frame with a second graph that has a different
time frame. For example, if you use a 1 minute time frame for scaling currency pairs, you can consult a graph
with a 5 minute time unit to discover emerging signals.
In addition, you can always consider using extra scalping indicators.
Another technique that you could possibly use with the Forex scalping is placing a Stop Loss for each position.
A Stop Loss ensures that the risk of suffering large losses is practically eliminated (this is not a guarantee).
The mini terminal within our plug-in for MetaTrader 4, MT4 Supreme, offers the possibility to immediately
give a Stop Loss with your order, and to choose the right position sizes for sensible Forex money management.
Finally, by automating your Forex scalping strategy, you can save a lot of time and energy. However:
... strategies must be constantly developed and improved ...
... automate your strategy only after it has consistently performed over a reasonable period of time ...
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