Scalping is most interesting strategy for trading on Forex Market
Many new traders find scalping as an interesting strategy for trading on Forex Market because it makes it possible to make a lot of money in a snap. Scalping is a daily strategy and has gained its popularity in particular with low risk and potential for great profits. Scalping, requires a lot of attention and concentration from the trader, while emotions have to go aside.
What is scalping?
Scalping is a strategy that involves opening a large number of very short-term deals. Separately, these mini stores do not have the potential for big profits, but as a whole, if the strategy is done properly, it can do a good job. Trades are always starting and ending, and can take only seconds to minutes. For scalping, diagrams with a length between one and five minutes are recommended. Some traders also use 15-minute charts, but this is a scalping maximum. Because this method still requires certain skills, experience and a great deal of self-control is not recommended to complete beginners. However, it is still one of the simplest within Forex if you leave the emotions aside. Scalping allows traders to quickly find trading opportunities without having to spend the day before the computer. The best time is when the American and European markets are open or during the morning hours on the European market.
Advantages of Scalping strategy
– Scalping offers a low risk because the losses are low.
– Many business opportunities throughout the day.
– Diversity of markets as well as trading in several different markets at a time.
– It is a profitable strategy, although it is traded daily only with small amounts.
– In time, profits are added up and can reach high values.
Disadvantages of Scalping strategy
– Scalping requires attention, attention and quick ending of the trader’s attention from the trader.
– Emotions must go aside because they can be an obstacle to intelligent and logical decision-making.
– The trader must be able to act under great pressure.
How to set 1-minute scalping?
We already know the theories and now we will show how to do it and what it takes:
Platform: MetaTrader 4 (and any other supporting indicators needed)
Currency pair: Any pair – the smaller the spread, the better
Time scale: 1 minute
Indicators: 100 EMA, 50 EMA (Exponential Moving Averageand) Stochastic oscillator
Market: High Volatility or New York or London
Now our trading terminal is set so we can look at the entry points and the required Stop Loss levels.
One minute scalping – long position
First EMA (50) should be above second EMA (100)
Once this happens, you need to wait until the price comes back to the EMA indicators
The stochastic oscillator must at level 20 exceed the level 20
Once all three indicators are placed, it is safe to open a long position
However, in order to be insured, a Stop Loss command is required. We place 2 to 3 pips below the bottom of the last swing. Because this strategy is short-lived, the expected return is 8 to 12 pips per trade, so the Take Profit command should be placed within the range of 8 to 12 pips from the entry price.
One minute scalping – short position
As you have guessed, using a short position is the opposite of a previous strategy.
First EMA (50) should be below second EMA (100)
Again, wait until the price comes back to the EMA indicators
The stochastic oscillator must pass level 80 at the bottom
Once all three indicators are located, it is safe to open a short position