Forex scalping
Forex scalping has gained high popularity nowadays.We welcome you to explore our free and steady growing collection of Forex scalping strategies and ideas!
Yes, true scalping involves risks as well as any other type of trading.
But if done correctly Forex scalping provides an additional degree of risk management as a result of holding trading positions for a very short period of time as well as constant monitoring of the price and collecting quick profits as they appear.
Please, do not forget to read our disclaimer policy. In short, Forex scalping systems you find below if used will assume trader’s own risk and full responsibility.
Scalping Forex is fun. Learn it and trade profitably!
Best of luck in scalping the Forex!
Scalping ideas (ADX and Bollinger bands)
Scalping with the help of ADX:
To scalp effectively with minimum time spent, Forex scalpers need to know when the market is trending well and when there is nothing to wait for.
To find out about the strength of the market trend use ADX (Average Directional Index) indicator.
ADX does not show the direction of a current trend, it only shows the strength of the trend. Reading below 20 indicates a weak trend, reading just above 20 – gaining new strength trend and reading above 40 – very strong trend.
It is that simple – scalping is weak when the market is weak, when ADX deeps below 20 – opt for other life activities, do not sit and waste your time in Forex.
Scalping with the help of Bollinger bands:
Bollinger bands can help determine trends and especially upcoming trend reversals.
When price moves outside the Bollinger bands it is suggests a continuation of the current trend, while bottoms and tops made outside the Bollinger bands change to bottoms and tops made later inside the Bollinger bands suggest upcoming trend reversal.
Scalping system #1 (Economic news releases)
Look for the important news to be released. Choose the most influential ones that are expected to shake the market well. Once got news (last can be found in any Forex economic calendar) find out which currency pair is going to be affected.
Now, 15 minutes before the data is released place buy/sell stop orders on both sides 15 pips away from the current price. Half an hour prior to the big news Forex market usually flats out – no significant trading is done, currency is often “stuck” in a small tight range.
When important news is released, the currency will move easily, producing large pip movements in either direction. Using this scalping strategy, traders will be able to get in and out of the trade in seconds at almost zero risk.
After studying for a while a particular currency pair and its reaction to the news, traders can predict direction of price spikes and the length of the move in pips to set entries and profit targets more accurately. Look for the important news to be released. Choose the most influential ones that are expected to shake the market well. Once got news (last can be found in any Forex economic calendar) find out which currency pair is going to be affected.
Now, 15 minutes before the data is released place buy/sell stop orders on both sides 15 pips away from the current price.
Three EMA’s scalping
I use scalping on three EMA’s: 10,21 and 50, on EURUSD 15M, focusing on the 10-EMA to cross over both, 21 and 50 EMA. After a close off the 50 I enter, setting my Stop 5 pips above last candle (the one, which closed off 50 EMA). I do not set a fixed Profit, however change frequently to the 5M to observe if a reversal is near, which would be my signal to exit. For orientation I use ADX 14 with it, however just use it to check/orientat (+ above _ or vice versa, pressure/momentum etc.).
I do like convergence set-ups as they are pretty safe from my experience. For example do I use a combination of two averages, say 50 and 100 EMA and check their relation with overbought/oversold. I buy when the averages are in buy and the market is oversold and vice versa. One can use several Indicators for the identification of overbought/oversold. Pretty save shot on the longer charts, say at least 1H.
Very good system is Complex No. 3, Divergence, top system, which I like very much.
Well that’s it in a nut-shell.
No! something else: I do not believe in un-observed trades, I close at the end of NY-trade in time, even if I have to accept a small loss.
Also am I not exactly a friend of trading robots, I find these quite invasive and some even quite pompous/indecent by arguing with this life-style-BS (sorry). What I also observe is that certain of these sites recommend each other in a circle, which is more….
5 pips with GBP/USD
This simplified trading system derived from the previous “2 SARs to go” system and is a work of our dedicated scalper – Alex Wakemann. Thank you, Alex! His scalping insights will be published and updated on our pages as we move on. With this Forex scalping system Alex claims to always get at least 5 pips per trade.
Trading setup
Trading pair: GBP/USD
Time frame: 5 minute chart
Indicators:
MACD (5, 8, 9)
SAR on MACD (0.1, 0.11)
SAR on the chart (0.1, 0.11)
Trading rules
Trade only from 7:30 am EST to maximum 11:30 am EST. Preferred days – Tuesday to Friday.
Once both SARs are in agreement, e.g. suggest the same buy or sell opportunity – enter with either 1 order (to get 5 pips and leave the trade) or 2 orders at once (to chase the market further).
A stop loss is adjusted upon entry to the last but one SAR dot on the chart. If at the moment of the entry there is only one dot on the chart – set stop at this dot.
Profit targets – 1st – 5 pips.
2nd – only when an opposite signal appears – both SARs change direction or when the stop (by that time it is usually a profit stop or at least a break even situation) is hit.
If before that you feel that profits are already high to keep – lock them in earlier.
Now about exits:
If while keeping an open trade one SAR suggests an opposite trend, but the other does not – stay in trade.
Remember – a stop loss is always at the second nearest SAR dot on the 5 min chart.
With each new SAR dot – adjust stops for all orders to the second nearest SAR dot.
Why second? I found that very often the first SAR dot can be hit, but the second will hold. At that time I do not move my stop and sit tight until the SAR reverts and I can continue trading.
Additional notes: want even a better entry? Then open an additional 1 minute chart with the same settings and once got a signal from 5 min chart, look at 1 minute. Does the price confirms/moves in your direction or is it going the opposite way (temporarily making small corrections)? With the second option you have a time to wait until the price on 1 minute chart aligns with 5 minute chart.
Happy Forex scalping!
