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You can make fast profit from the market within one or two hours of trading?
No need to stay the whole of the day and wait the trend to reverse its direction!
If you have a scalper trading profile, or you want to be a scalper then this article is for
you.
The scalping strategy is especially for traders that want to snatch a quick profit from
the market.
They use also the fundamental analysis to trade the Forex market by targeting news
release times.
For me fundamental analysis is a waste of time for scalpers, but they just need to use
it to monitor their trades.
Because if market makers know the influence of an important news... Simply they will
raise the spread price, sometimes it can be more than 150 pips!
You must avoid scalping the market using the fundamental analysis!
But they still some reasons that could obligate you to choose a scalper trading profile.
Scalping is for you if:
You have not enough time to track currency charts every time.
By the nature you have a nervous trading psychology so you need to make
quick profits.
You want to enter and exit the market quickly.
You are a new trader and you do not have enough experience to trade the long
term.
You are afraid to take significant Forex trading risks.
You have a small capital to invest.
You like to trade small time frames (one or five minute chart).
You can concentrate during trading sessions.
You have the speed to react easily to different market contingencies.
There are multiple pros and cons of scalping strategies as I said above, you need to
choose your strategy to match your trading style.
Advantages:
Disadvantages:
The first disadvantage of scalping is that you need to choose a credible broker to trade
using the scalping strategy.
Because many brokers dislike scalpers so they react by enhancing their commission
(Spread).
To fix this problem, before you choose a broker, ask if they allow scalping.
... And search for trader's testimonials with scalping using the broker you want to
trade with.
You must choose currencies that match your Forex trading style.
For you as a scalper, you should trade USD major currencies.
What I mean is:
That you must trade USD currency pairs.
Here is a list of the most liquid and popular currency pairs from the largest liquid
currencies to the lowest:
1. EUR / USD
2. USD / JPY
3. GBP / USD
4. AUD / USD
5. USD / CHF
The EUR / USD pair is the most popular currency traded as it offers a high liquidity
for all traders profiles.
According to the richest.com USD currency takes up to 84,9% of all Forex
transactions.
EUR takes up to 39,1%
You like to get a good profit from the market using scalping strategies?
Trade EUR / USD and avoid pairs not including the USD until you trade using a real
Forex account for several months.
Avoid the cross rates like:
EUR / GBP
AUD / JPY
GBP / CHF
If you want to be a real Forex scalper then you need to try every time to use logic and
your trading system.
I have published an article about 3 steps to beat emotions this could help you to clear
your mind from the famous enemies of all of the traders (Greed and Fear).
Otherwise, the best time frame to use the Forex scalping strategies is the 5 minutes
time frame (the higher time frame you trade the more your strategy will make
significant results).
The NO dealing desk: that is an intermediate between the trader (you) and
banks that want to invest your money in the Forex market. I
recommend these brokers for technical analysis users.
The dealing desk who works directly with the market, more suited to traders
that use fundamental analysis.
As I said above, there are a lot of brokers around the world of Forex trading.
Each broker has its own technical aptitude, and requirements that a trader must have
to trade with that broker.
Those requirements are not significant for long run traders (Position traders - Day
traders...).
But for scalpers these conditions are meaningful... As they are the distance between
gains and losses.
The first thing as a scalper that you should verify to choose a broker is:
How much spread you are going to pay?
For day or position traders, this is not important because they open one or two
positions per a day.
The spread cost for long run trading style still neglected.
It's different for a scalper, you need to choose a broker that provides low spreads!
Because you still need to open tons of positions in a short time to make a good reward
from the market.
The second thing a scalper should search about to choose a broker is the scalping
policy of that broker.
Respected brokers with large client bases have their own scalping policy where they
describe scalpers action limits...
Some brokers by nature, they do not allow traders to use scalping.
The third issue scalpers must pay attention to it is the tools provided by the broker.
You should choose a broker that provides all of the tools you need to scalp the market
(it depends on your scalping strategy).
For example, if you are a scalper, you need a broker that affords a platform that do
not tire your eyes as you need to focus your eyes for a long time on the charts.
You need also a platform that provides multiple time frames (1 minute - 5 minute - 10
minute...)
The last issue to look about if you are a scalper is to verify the execution time the
broker need to execute your trading decisions.
Fibonacci levels.
Step #2
Now...
Set the moving averages we need to use.
We are going to use:
200 Moving averages that will give us the major direction of the trend.
50 Moving averages that will help us to confirm the 200 Moving averages.
3 and 7 moving averages that will help us to enter and exit the market.
If you do not know how to set the Moving averages indicator, here is how to set it:
Step #3
Now set the momentum indicator, this indicator will going to help you to define
overbought and oversold points.
From your navigator select the momentum indicator:
Step #4
Now You should find swings.
This step is very easy to do as the Zigzag indicator will do that instead of you.
From your navigator select the zigzag indicator:
Swings will be clear after you set the indicator in your platform.
Step #6
Because we want to scalp the market so you need to switch to the 5 or 15 minutes time
frame.
PS: I do not recommend to scalp using 1 minute time frame.
Because if the market is very volatile it can destroy your dreams easily.
Also the 1 minute time frame do not give you enough time to do the technical analysis
like it should be done.
Step #7
Now you should look at the 4 hours time frame and write on a piece of paper the
trend line you have just discovered.
This will going to help you to not enter against the major trend line, to make 80% of
your decisions guaranteed.
For me, I have defined the major trend of the EUR / USD.
And I find that the trend has changed its direction from an uptrend to a down trend.
As you look at the image above the trend line is tested for three times, the price fail
three times to break the trend...
Now adjust the time by selecting "Match automatically" then click "save settings:
White color: Non-economic news like bank holidays (the Forex market may
stop working temporarily because of the holidays)
Yellow color: Low impact news.
Orange color: Medium impact on the price movement.
Red color: the news may have a huge impact on the price movements.
Step #5: Select the period of time you want to know news about.
I recommend to select the day you are in.
Now...
Let's suppose that you want to know the news that could impact the Canadian dollar
currency (CAD).
Source: the source of the news in this case the source is Richard Ivey School of
Business.
Usual effect: it's very important to know how to use this information, usual
effect shows you how much the news will impact the currency.
Like you see in the image above it shows that if the actual > Forecast then this news
will affect positively the currency.
Actual = 58.0
Forecast = 53,5
There are a lot of reasons that can push you to exit a trade.
Here are 5 reasons in my opinion that could obligate you to close a trade:
According to your system you concluded that you have to close the position.
For more than 3 days the position displays a loss.
You confront technical issues in your laptop or in your trading platform.
You have emotional problems (greed and fear).
Bad news are coming about the pair of the currency you trade.
In my scalping strategy I exit the trade using a simple Moving averages technique:
If you open a long position...
Once the 3 moving average begins to cross the 7 moving average from the top to the
bottom, close the position:
PS: Make sure to confirm your decisions using the momentum indicator because
sometimes it could be a fake cross.
I exit the market also using the Fibonacci retracement.
If you go long in a position you just need to wait until the price approach the 61,8%
Fibonacci resistance line
Then exit the trade (like you see in the image below)
to the 127% Fibonacci level, it's a kind of a big deal almost 80 pips as an additional
gain).
If it was not the case, just close the position and collect your profit!
Otherwise, if you go short (Sell position) you need to wait until the price approach the
61,8% Fibonacci support line.
Then get out of the market!
If the 61,8% Fibonacci support line has been breached by the price, target the 127%
Fibonacci level.
[Make sure you enter the market in the direction of the major trend]
Conclusion
The Forex scalping is a strategy that needs to focus the whole of the
day Monitoring the market changes.
It's not easy at all to scalp the market because your target profit range from 5 to 30
pips
You are obligated to pay attention to several variables (like currency spreads).
This strategy you just discovered, builds significant results if you use it the right way.
What I recommend is to train yourself for enough time using a demo account before
you use it in a real account.
And now tell me
Do you use the Forex scalping?
Do you use any special strategy to scalp the Forex market?
If you have any question, ask!
Article Source:
http://investoune.com/forex-scalping/
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