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.
However, the bottom of fountains are slippery places and it would be easy to fall over and drop the coins.
This strategy represents the generation of profit from Forex market transactions, which sometimes last less than several minutes.
A trader using a scalping strategy will earn their profits from making a large amount of small transactions unlike Internet traders who spend larger amounts but wait for their profit to emerge.
If you want to be successful using the scalping strategy, you need to understand how to leave a deal with the smallest of losses.
Here we will consider three trading approaches which use a scalping strategy to make profit. These will be:
Play on Time, Trade against a Trend and Trade along a Trend.
Play on Time
This one has several approaches.
The first method is known as the 15-minute opening range breakout. Profit is taken very quickly and every deal usually takes no more than one minute.
To do this you wait until a breakout forms and then you can enter the market at a couple of ticks above the maximum or a couple of ticks below the minimum. As soon as you make a one-point profit, you close your position.
'Shake up at 10 o' clock' is the next method. This assumes New York time at which point an attempt to reverse trend happens.
You wait for the first 15-minute bar to close and watch. If the market is near the day maximum within the first half an hour, you should be ready to open a short position and vice versa:.i.e. Markets are nearing the minimum of the day so you open a long position.
You would enter into the market at one tick after the minimum of the last 15-minute bar when placing a long position and one tick over the maximum for a short.
Having made a one and half point profit, you exit.
Continuing the New York time theme, the next method is 'shake up at 1500'.
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.
The exit rules are similar to the previous methods. You should stop all orders within half an hour.
Trade against a Trend
'Cents collector' is a method of trading against a trend.
Here you look at the candle charts to search for bearish and bullish 'swallowed' candles. This strategy allows you to perform transactions only in the first and the last hours of trade.
Here you make one point of profit and then exit.
Trade along a Trend
You will see a range of methods to trade along a trend. Scalping with standard deviation is one.
This approach suggests a re-entry into the Forex market at pullback, i.e. the only time to re-enter the market is when there is a major pullback.
In case of an ascending trend you should buy on pullback down, and if there is a descending trend, you should sell on pullback up.
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 'anti' method is another Trade along a Trend approach.
To do this you need a 5-minute candle chart on which you should use the slow stochastic with a period of 7 and its moving average with period 10.
Once the stochastic goes across the moving average above at the end of any 5-minute period, you should buy at this point and vice versa.
Again, having made two points profit, you close the positions.
Repeated entries are not recommended in this strategy.
This article has only very briefly looked at some of the scalping strategies. Acting rapidly and decisively is best for any Internet traders who want to use these methods.
You do need to accept that scalping strategies will not bring you large profits immediately and that you can lose.
You will gather your profit slowly, but each earned cent will give you priceless experience of trading on the Forex market.
And so you will only become more skilled as an Internet trader.
Don't forget that there is no such thing as easy money and it takes effort and patience to make large profits!
by: ric4kq3oza
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