Forex scalping strategies

2024 Author: Howard Calhoun | [email protected]. Last modified: 2023-12-17 10:16

Many people wonder what is scalping? In simple terms, scalping is the exact entry into the market.

What is Forex scalping?

In Forex there is such a thing as pipsing, and many novice traders confuse these two concepts. Pipsing is a short-term type of trading in the foreign exchange market with a minimum profit. That is, the profit on the transaction can be only a few points, and the transaction itself takes only a few seconds. Scalping can also have a small profit, however, in terms of time, a scalping trade can last from a few seconds (as well as during pipsing) to one hour, sometimes even more. The duration of a trade during scalping depends on the market situation. In any case, scalping is a short-term type of trading.

Main advantages of scalping trading method:

1. Short-term deal.
2. Quick profit from the trade.
3. Tradescalping takes very little time. Therefore, for traders there is an opportunity to trade at any free time. Many traders manage to trade even during work breaks.
4. Availability of trading. Scalping does not require any special analytical skills and knowledge. In order to trade with this method, short-term trading does not require fundamental analysis. Typically, traders carry out graphical constructions, candlestick analysis, and also use technical analysis. Traders can use intraday analytics to predict the market.

Main indicators for trading strategies when working with the scalping method

All scalping trading strategies include various indicators. The main ones are such as timeframe, expiration time on binary options, as well as various technical indicators (if used), graphical constructions, figures. Graphical constructions are needed to indicate important technical levels, depict channels, and plot extremums on the chart. Graphic figures are the construction and designation of a triangle, double top, triple top, double bottom and other figures on the chart.

And there are also scalping strategies that use non-indicator trading. This is a trade that does not use any technical indicators. Technical analysis is carried out on the basis of changes in market prices or candlesticks; in this case, candlestick analysis is used. During this analysis, the traderconsiders and organizes various candlestick patterns or configurations.

Scalping strategies, features

1. Short time periods, timeframes. Usually they use such strategies for working by scalping, which can be used on M1, M5, M15, M30, H1. These are the most common scalping timeframes.
2. Small take profit, averaging 3 to 15 pips.
3. Small stop loss, no more than 10-20 pips. Quite often stop loss is not used at all.
4. Trader's response speed. While working on any scalping strategy, a trader is in constant psychological stress. He must be able to quickly respond to any changes that occur in the market.
5. A large number of transactions in one day. On average, a trader conducts from 30 to 100 trades per trading day, with automated trading this number can reach a thousand trades.

Next, descriptions of various TS (trading strategies) will be presented.

Scalping Trading Strategy: Puria Method

In this section scalping on "Forex" will be considered. Puria's strategy is one of the most understandable and simple TS. There are several varieties of this strategy. Their main differences are the selection of moving averages. The entire trading strategy is based on moving averages and the MACD indicator. You need to set the following moving averages on the working chart:

1. With period AO 85. Method - linear weighted, shift must be 0, applyto Low.
2. With period AO 75. Method - linear weighted, offset must be 0, apply to Low.
3. With period AO 5. Shift must be 0. Simple method, apply to Close.

Now you need to set the MACD indicator with the following parameters 5/26/1, apply to Close.

Having set up the indicators in this way, you can start trading and use scalping on Forex. The Puria strategy works on the H30 timeframe. You can use almost any currency pair or any underlying asset, at least this strategy works on all major currencies. Take profit should be set at 15 pips. Stop loss is optional.

Rules of the Puria trading method

1. When crossing all moving averages, you need to open an order. It opens in the direction indicated by the moving averages. If AOs are directed upwards, then you need to open a buy deal. If, on the contrary, they are directed downwards, in this case, you need to sell.
2. MASD indicator should cross the zero mark. You need to enter the market after the first bar of the indicator is fully formed, you need to enter on the second bar.
3. It is necessary to wait for the confirmation of the indicators by each other. In this case, the Forex trading strategy is Puria scalping, after crossing the moving averages, it is confirmed by the MASD indicator.
4. Closing the trade: when the moving averages cross in the opposite direction or close the trade by stop loss.

Trading strategy forscalping "Three moving averages"

This is the simplest scalping strategy. This trading strategy is based on simple moving averages.

1. Moving average with period 3.
2. Moving average with a period of 5.
3. Moving average with a period of 8.

The idea of the trading strategy is as follows: when all the moving averages cross, you need to open your trade. The order is opened in the direction where the moving averages point. For example, AO3, AO5, AO8 are directed upwards, in the direction of an uptrend, therefore, you need to buy, that is, open an order to "buy" (buy). Similarly, when AO3, AO5, AO8 are directed downwards, in this case, you need to sell, that is, open an order for "selling" (selling). These are market entry points.

Exit from the market occurs when all AOs point in the opposite direction. That is, there is a trend reversal. For example, there was an upward movement, there was a market reversal, and there was a downward movement. All moving averages changed their direction and crossed. In this case, you need to close your deal. As you can see from the description of this trading strategy, everything is very simple. It is thanks to simple trading strategies that Forex scalping has become very common. The "Victory" strategy, which will be presented below, is also one of the simplest and most popular among the TS, it is a channel forex strategy.

TS Pobeda: conditions

Manytraders are interested in Forex scalping. The "Victory" strategy is an indicator trading strategy. This trading strategy is based on several technical indicators. Most indicators will need to be downloaded from third-party resources, as they are not the main ones for the MetaTrader 4 trading platform.

List of indicators used in this trading strategy: TMA is the main indicator, as well as SSRC, Currency Power Meter. It is possible to add additional indicators:

• HP_DIFF - to close positions.
• Master Money Bot is used to calculate the lot.
• VE_AIMS is used when modifying orders.
• Scalping strategy "Victory" is used on M1 and M5 timeframes.

You cannot trade and use this TS during the release of important news on the market. Trading stops 25 minutes before the release of the news, and resumes 25 minutes after they pass.

Rules of trading on TS Pobeda

If the main indicator is pointing up, then it will be necessary to buy. Conditions for buying: TMA is directed upwards, the market price has touched the lower line of this indicator and started to reverse; SSRC indicates up direction, channel width is more than ten points; The Currency Power Meter shows the strength of the base currency more than the strength of the quote currency. Profit is set at 5 points, stop loss is set at 15 points. On the M5 timeframe, the market price is at the top or middlechannel parts. Similarly, only in a mirror image, sales are made on the foreign exchange market. Exit from the market - upon reaching the take profit.

What is binary options scalping?

In binary options, scalping is Turbo options short-term, lasting sixty seconds, or one minute. In addition to Turbo, a variety of scalping on BO includes options with a duration of one to fifteen minutes. Consider the two most popular trading strategies for Turbo options.

Binary scalping strategy: Martingale method

The basis of this trading strategy is to increase the initial rate if the option closed with a loss. In order to work with this method, the trader will need a large deposit. You should immediately warn that such a trading scheme is associated with high risks and refers to aggressive methods. Basically, all trading strategies for scalping use the aggressive technique.

The advantage of this scheme is that you can get a big profit in a short time. The downside is the risks. Therefore, each trader has to choose which method he will work with. Or it will be a classic scheme of work, when the risks of trading transactions are minimal, but the profit will also be much less. Or it will be an aggressive trading method, when the risks of transactions will be quite high, but the profit will also be large.

Trading strategy for binary options using the "Pyramid" method

BUnlike Martingale, this trading strategy is based on an increase in each bet if the option closed with a win. In this case, the risks of a trade transaction are minimized, since all the risk falls only on the profit received. The most you can lose is the original bet. Profit, like a snowball, gradually accumulates, and the trader risks only the profit received. Therefore, when working on this trading strategy, a large deposit is not required. However, such a vehicle also has its drawback, which is the recovery process. It should also be remembered that these two systems are mainly used in various casinos, in games. And, as many people know, there is a completely different percentage of winning and losing.

For example, with a bet of one dollar in a casino, the user receives a 100% win, and on binary options, the win will be from 70 to 90%. This percentage must be taken into account when increasing rates during a loss (winning, when working using the "Pyramiding" method) on options.

In conclusion, it is worth recalling that working on binary options, as well as on the Forex market, is associated with high risks. Any trader has a high probability of both winning a certain position and losing partially or even completely his investment. Therefore, before embarking on this type of earnings, you must definitely familiarize yourself with the rules of trading in the foreign exchange market, as well as undergo full training and get the appropriate practice onpractice account provided by brokers. Absolutely all training accounts (demo accounts) are provided by brokers for free. Any trader has every opportunity to try his hand without risking his own money on such a practice account. And after the trader goes through the preparatory stage and learns to independently predict the market, then you can switch to a real trading account. The best scalping strategy is a well-tried and tested TS trader.