Forex traders may already be very familiar with the term forex scalping trading strategy.
Of course, traders already know what forex scalping strategy is.
But there’s nothing wrong with us going back to discussing scalping and the ins and outs.
Hopefully adding insight to all traders.
Forex scalping system Explained.
Scalping is a trading strategy at a low timeframe with the aim of gaining fast profits.
Usually, they use timeframe M15, M5, or M1.
This technique is the most popular forex trading strategy is high-frequency trading.
Where traders may make transactions from tens to hundreds per day, but most of their small targets range from 5-10 pips.
For those who use this strategy are scalper traders.
Scalping is the safest way of trading, so this strategy becomes more popular.
Because scalper plays on a low time frame and holds its position in only a very short time.
Observations on overall market conditions are very limited, and risks arise due to smaller market price movements.
Basically, a true scalper only cares about the size of the spread and doesn’t pay much attention to market conditions that are trending or sideways because it’s not significant.
Scalper only looks at the level of price volatility in a very short period of time.
Is the scalping method suitable for all trader?
Not all traders are suitable for using scalping strategies.
Scalping targets a small profit, but because it makes transactions repeatedly it allows profit to be large.
Provided that all transactions generate profits.
Scalpers always avoid taking big risks.
They abstain from trading with a single hit making big profits but trading with high frequency and small, but safe profits.
Therefore a scalper needs patience and must diligently pursue market price movements to get profits as often as possible.
For those who have a serious character of analysts who expect spectacular results in their trading, they will be disappointed and frustrated when implementing this method.
A very important thing for a scalper.
Trading with the scalping method requires greater attention than using other trading methods such as swing trading or long-term trading.
A pure scalper will be able to open and close 10 positions at once, some of which even have more than one hundred trading positions a day.
Because there is no one position that has a large enough loss, a scalper is not reckless in opening or closing positions and determining stop loss or profit targets.
Because this method is a high frequency of trading, it requires a fast connection, and good server quality, so it will easily open and close positions.
At first, this method might be difficult, because it requires speed and determination that can affect the emotions of traders.
But for scalpers who have practiced this method for a long time, it will be comfortable and difficult to switch to another trading method.
For a scalper who wants success the ability to focus and concentrate on his trading position is absolute.
It is not an innate talent from birth but must train it continuously with a serious commitment to becoming a true scalper.
Lot size in scalping.
Scalper must be consistent in using lot size or volume size in their trades.
The application of lot sizes that are always different for each position opening is very harmful.
Maybe you can apply this flexible lot method if you are not using the scalping method, or when you end the scalping and trading methods in other ways.
The principle of a scalping strategy is basically to cover losses with the profits earned.
And if you use a lot size that is not fixed or random, sooner or later it will cause an imbalance in the calculation of overall trading results.
Automatic Scalping trading system.
For those who are not full-time traders, the scalping method can be very time-consuming.
Those who trade forex only to look for additional income for their permanent business certainly don’t want to spend hours practicing scalping forex.
To help those who trade “odd” and are interested in the scalping method.
Several software companies have developed automated trading systems that have been widely advertised and sold on various leading forex sites.
But choosing this software must also be careful, doing research by looking for software performance references, so that it does not regret when deciding to buy software, but it turns out it does not provide benefits or even cause a margin call.
Forex scalping strategy for beginners.
There are actually many references to learning scalping for beginners, here will only be discussed a few easy types for beginners to use and understand.
The Best Scalping Technique With Stochastics.
Their Scalper traders cannot use the M1 timeframe on all currency pairs, but only for currency pairs with large fluctuations in the London and New York trading sessions.
If using a currency with a slow movement, the trading signal will be minimal even though this includes the best scalping technique.
For this scalping strategy, use the EMA and stochastic indicators.
- Currency Pair: any, along with has low spread.
- Timeframe: 1 Minute (M1).
- Indicators: Exponential Moving Average (EMA) 50, Exponential Moving Average (EMA) 100, and Stochastic Oscillator with a setting of 5,3,3.
The rules for entries the best scalping are very simple:
- Open Buy if EMA 50 is above EMA 100, and Stochastic crosses from below to level 20.
- Open Sell if EMA 50 is below EMA 100, and Stochastic crosses from top to bottom level 80.
The Best Scalping With Bollinger Bands.
The second best scalping technique here also uses indicators Bolinger Band that are common to every trading platform, including Metatrader.
You can use it on the 1 Minute timeframe or the 5 Minute timeframe, on sideways market conditions.
The requirements for using this strategy are:
- Currency Pair: All currency pairs, but best with GBP / USD.
- Timeframe: M1 or M5.
- Indicator: Bollinger Bands in the default setting (Period 12, Shift 0, Deviation 2).
The rules to trade using this indicator is very simple:
- Open buy if price enters the upper band, the tendency of this area to be a resistance area where the price may be reversed.
- Open Sell if the price is in the lower band, the price trend in this area will turn around because it becomes a support area.
- Put Stop Loss and Take Profit in the range of 5-10 pips.
Best Scalping With Parabolic SAR.
In a trending market condition, this strategy has good accuracy, using the Parabolic Sar indicator, and the Simple Moving Average.
The requirement for this scalping strategy is:
- Currency Pair: All currency pairs, but best with EUR / USD.
- Timeframe: M1.
- Indicators: Simple Moving Average (SMA) 60, and Parabolic SAR default settings (Step 0.02, Maximum 0.2).
Rule entries are also very easy to use this strategy:
- Open Buy when the price of EUR / USD is above the 60 SMA and moves up above the Parabolic SAR
- .Open sell when the price is below 60 SMA and drops below Parabolic SAR,
- You can place Stop Loss and Take Profit between 10-15 pips from the entry price.
Forex scalping strategies for active traders.
Scalping strategies for active traders, most notably about transaction costs, predicting future prices is always difficult, high transaction costs provide a special burden for active traders.
Choosing a broker that offers low fees, will provide active scalper trader benefits because he will open and close a position for only a few minutes with a low target, you can try TenkoFX which offers competitive spreads for scalping.
Scalping strategies for active traders are one of the main examples of popular trading systems: intraday RSI strategy.
Below is a graph that shows the theoretical results of a simple RSI trading strategy assuming zero transaction costs on a 1 minute trading time frame.
This graph shows that this strategy is theoretically advantageous at Eur / Usd even within 1 minute.
Of course, if something seems too good to be true, it usually does.
From these results, assuming that traders pay zero spreads and zero commissions on every single trade.
Assuming that it allows active traders with a 1-minute chart to produce 7800 large trades in a mere span of 3 years.
The high-frequency range trading strategy is very sensitive to transaction costs.
But other factors also influence the results, for example, due to extreme volatility, and also the unstable emotional conditions of the trader itself.
With such evidence, active traders must try to avoid situations where prices are clearly at risk of prolonged intraday movements.
Such an effect will destroy almost all trading strategies, whether scalping or intraday trading, another reason is that increased transaction costs related to choppy market conditions will also wipe out high-frequency strategies.
A good time to trade scalping for active traders.
Because trading when transaction costs are high and volatility is strong often destroys trading, it is important to trade when the transaction costs are lowest and the market is the quietest.
The chart below shows the important facts about Euro / US Dollars.
From the observations, the London session provided volatility and low spreads, maybe this is the best time for scalping active traders to make transactions, in that session it might be able to make trades dozens of times to gain profit.
During the Newyork session, overlapping also provides an opportunity to make transactions, but this is quite risky when transaction costs increase.
Many traders choose the Asian session, with low volatility, to do scalping.
The advantages of high-frequency trading, provide benefits in a short time, but the weakness of this strategy if transaction costs are high, and choose to trade in conditions with high volatility because it will often fail.
Forex scalping ea strategy system.
There may be traders who are interested in using scalping strategies, but they don’t have time to always be in front of the monitor.
One way to overcome this is by using EA scalping, this is automatic trading without requiring the intervention of the trader’s hand.
One of the EA that will be discussed here has the name EA scalping V1.3.
EA Scalping V1.3
EA is designed with several indicators as well as the main signal, by using EA scalping this new digital version will answer the scalping problem in your trading transaction.
This ea uses several indicators as trading signals to determine automatic entry.
- Parabolic SAR.
- EMA 200.
- EMA 55.
EA has been tested in a very long time, starting from 2006 until now it still exists.
EA has passed several tests and corrected bugs/errors in the code.
How EA Works.
Basically, EA will make a transaction to see the reference of the signal that has been given an indicator to EA.
Once the indicator shows the signal, EA will immediately open the position according to the rule.
EA will make a transaction with the following rules:
- BUY if the EMA 55 is above the 200 EMA & SAR below the candle & MACD goes up.
- SELL if EMA 55 is below 200 EMA & SAR is above candle & MACD is down.
EA Scalping v1.3 is classified as EA “Full Automatic” which can automatically trade without hand intervention by the trader.
The strategy used in EA uses orders once execution, and able to work in trend is trending or sideways.
- Initial balance = $ 100
- Time Frame = m30 or m1.
- Pair = EURUSD / GBPUSD.
- Other settings = follow EA.
- Works automatically at all times.
- Able to modify orders.
- Available SL and TP and trailing stop
- Capable run on broker 4 and 5 digits.
- Not open trades every day.
- False signal indicator.
EA Scalping v1.3 can make transactions at any time. However, we will not know when EA will start opening transactions.
Using VPS is better than using a personal computer because EA does not open new transactions every day.
Forex scalping indicator.
One method of scalping trading uses indicators.
But sometimes, many traders are still having difficulties in finding the most appropriate setup indicator, especially for trading strategies such as scalping.
To overcome this difficulty, one a provider of a variety of trading systems and free indicators, recommends custom indicator Instant Profit Scalper.
Instant Profit Scalper has 3 main views; arrows, trend lines, and signal captions.
Arrows appear starting the trend line in 2 color versions, pink and yellow.
If viewed according to the example of Instant Profit Scalper display on the chart above, it will be clear that the yellow arrow indicates the start of a bearish trend, while the pink arrow indicates the beginning of the bullish trend.
As a compliment, Instant Profit Scalper displays a description on the bottom right of the chart that confirms signals from the arrow and trend line.
This indicator also features an automatic alarm if new opportunities arise from trend signals on small timeframes.
Not only an open position recommendation, but you can also get stop-loss instructions through this warning system.
Instant Scalper Profit is lagging but is able to generate buy or sell signals according to trends read on small timeframes.
Rules for trading with the Instant Profit Scalper indicator:
Open Buy if:
- A pink arrow appears, followed by a rising trend line and a similar color.
- Description of the signal is pink and reads “TREND IS UP – SIGNAL BUY”
- Description of the signal on the next timeframe also reads buy.
Open sell if:
- A yellow arrow appears, followed by a descending trend line and the same color.
- Description of the signal is yellow and reads “TREND IS DOWN – SIGNAL SELL”
- Description of the signal in the next timeframe also indicates sell.
Confirmation at a larger timeframe is very emphasized to increase the chances of success.
Why is that?
Aside from being the easiest confirmation method, the method also helps traders recognize open opportunities when the trend is already underway.
When viewed again, the best opportunity occurs when a new arrow appears on the chart.
However, because not all traders can capture this initial signal, the solution is to use the confirmation on the next timeframe.
How to install indicator, its easy, you can be rereading the previous article about free indicator
You can consider the instructions for the stop loss level included in this indicator’s automatic warning system.
If you already have a preferred risk/reward ratio, then you can just adjust it with the stop loss recommendations provided by the indicator system.
Below is an example of the appearance of an automatic alarm from the Instant Profit Scalper indicator.
Conclusion for Instant profit scalping
Judging from its compatibility with small timeframes, Instant Profit Scalper is indeed worth trying by scalping users who are still looking for the most appropriate indicator options to complete the trading strategy.
But once again, in using this indicator there is one thing that cannot be ignored: Pay attention to the signal in the next timeframe.
For better confirmation, you can also combine Instant Profit Scalper with other indicators or analysis methods.
Successful scalping strategies from the dark side.
First looking for information about forex secrets ebook – successful scalping strategies from the dark side, then knowing that this is an ebook that many traders talk about.
This is an interesting ebook, which might be useful to provide motivation and loopholes to the success of becoming a scalper.
On a search engine, this ebook went on sale on Amazon in 2013, it has been a long time ago, this book is written by Timothy Lucarelli, but unfortunately, this book is currently not available
From the reviews that have read and had this book, the content in the book is very informative and easy to understand.
There are only three reviews for this book, but all of them give five stars, and one trader tries to use scalping strategies like what is taught in the ebook, he states getting progress because of doing different scalping.
Maybe you are also curious about what is contained in this book but have not found a link to buy a successful book for Scalping.
I have found a link for this book but not entirely the page will be displayed, but it may still be able to provide interesting information for you to try to learn.
Scalping is a short-term trading method, which requires good execution speed and server quality, and selects low-cost pairs.
Scalping also requires analysis and choosing market conditions that are easy to analyze, avoiding markets with high volatility.
There are many ways to do scalping with the help tool of indicators or using EA, you can choose the best.
And finally, whatever the trading strategy, all need money management and strict risk management.