Methods And Strategies For Scalping
Some view it as a fountain of wishes where people toss in coins in the hope of finding luck.
When it comes to scalping, this strategy more closely compares to the fountain of luck.
You would think that just stepping into a fountain and picking the coins off the bottom would be simple and without any danger.
But the bottom is slippery and you can easily slip over and scatter all the coins.
This strategy rarely lasts longer than a few minutes and represents forex market profit creation.
Whereas Internet traders will use large sums of money and will wait patiently to make their profits, when dealers use a scalping strategy they profit from many small transactions.
To use a scalping strategy successfully, it is very important to learn how to exit a transaction with minimal losses.
In this article we will look at three approaches to using a scalping strategy to make a profit. These are:
Play on Time, Trade against a Trend and Trade along a Trend.
Play on Time
This one has several approaches.
The first one to look at is the 15-minute opening range breakout. The main facet of this tactic is the rapid taking of profit and that each deal frequently lasts less than a minute.
Wait until a breakout starts to form at which point you go into the market just a couple of ticks over the maximum or a couple of ticks under the minimum. You close you position once you have made one point of profit.
'Shake up at 10 o' clock' is the next method. Using New York time, this is when an attempt to reverse trend will take place.
You wait for the first 15-minute bar to close and watch. If you see that the market is nearing the day maximum inside the first thirty minutes, you should look to open up a short position and vice versa:i.e. The market is getting close to the day minimum so you should open up a long position.
You enter one tick after the maximum of the last 15-minute bar at short positions and one tick after the minimum at long positions.
Once you have made a one and a half point profit you withdraw.
The third approach is 'shake up at 1500' also assuming New York time.
In this approach you sell if the forex market was moving upwards for the thirty minutes before 3pm and buy if it was going down.
Again, you leave once you have made one and a half points of profit. You should stop all orders within half an hour.
Trade against a Trend
A method of trading against a trend is known as a 'cents collector'.
To do this you examine candle charts to find bullish and bearish 'swallowed' candles. Here you will only be transacting in the initial and final hours of trading.
You exit once you have made just one point of profit.
Trade along a Trend
Trading along a trend has a number of methods. One of them is scalping with standard deviation.
When the forex market is at pullback you re-enter, i.e. the only time to re-enter the market is when there is a major pullback.
You buy on pullback down in an ascending trend and sell on pullback up in a descending trend.
For this one, it's advisable to go for a 10-minute candle chart and moving average with period 10, placing one above another.
Once you have made a two-point you should close the position.
The next Trade along a Trend method we will look at is called the 'anti' method.
For this you should take a 5-minute candle chart and use the slow stochastic and a period of 7 and moving average with period 10.
You should buy once the stochastic goes over the moving average above of a 5-minute period and vice versa.
You should then close when you made a profit of two points.
Repeated entries are not recommended in this strategy.
We have lightly touched upon some scalping strategies here. Acting rapidly and decisively is best for any Internet traders who want to use these methods.
But you should be prepared for losses and understand that a scalping strategy doesn't bring large profit instantly.
You will gather your profit slowly, but each earned cent will give you priceless experience of trading on the Forex market.
And your skill as an Internet trade will only grow.
It's easy to forget that easy money doesn't exist and effort and patience is needed to make big profits!
by: toda99uewa
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