Introduction to Forex Scalping Trading Strategies
Forex Scalping means opening and closing many trading positions on a daily basis by targeting profits of a few pips (5-10 pips). These positions remain open usually for 1-2 minutes. Scalpers trade the 1-minute and 5-minute charts and usually prefer to trade exclusively two Forex Pairs (EURUSD and GBPUSD). The selection of one of these two pairs is crucial as these two pairs offer the narrowest spreads in the market (along with USDJPY). Scalping must be limited only in low-cost trading opportunities.
Scalpers can limit their trading cost by participating in a Free Forex Rebate Plan ► Information about the ForexExperts free Rebate Plans
Characteristics of a Forex Scalping Strategy
What characterizes all the following Forex scalping strategies is the great number of average trades per day but also the unorthodox Take Profit / Loss (P/L) Ratio. The Low P/L ratio means that the potential loss of each trade exceeds the potential profit. You can get 30-40 average trades and the P/L ratio is by rule less than 1. In order to prove profitable as a Scalper, you should enjoy a winning ratio of more than 65%. That means that out of 100 trades 65 must prove profitable while 35 can be unprofitable. This is a difficult task and therefore scalping is not suitable for all traders.
■ Daily Trades: 20 - 40
■ Profit/Loss Ratio: 0.5 - 0.7
■ Leverage: 1:100 – 1:200
■ Spreads: very important (max 1.5 pip)
■ Slippage: very important
■ Overnight Charges: No
■ Upcoming News: usually irrelevant (Scalpers avoid to trade 30 minutes before and after key news releases)
Forex scalping strategies can be manual or automated strategies. The automated Trading Strategies are applied by automated trading systems called Expert Advisors or Forex Robots.
You may ► Compare Expert Advisors here
Alternatively, you may scalp Forex by using manual commercial systems ► Info about the EA Builder for MT4/MT5
These are some trading strategies for Forex scalpers.
Scalping Strategies
TRADING STRATEGIES |
ASSET AND TIMEFRAME |
INDICATORS AND SETUP |
TAKE PROFIT AND STOP-LOSS |
MORE INFO |
HIT & RUN STRATEGY |
■ M1 timeframe ■ Forex Currencies
■ 30 daily trades on average |
■ Parabolic SAR (default) settings:
■ Simple moving average (SMA): 50 periods |
■ Take Profit: 8-10 pips ■ Stop-Loss: 12-15 pips ■ Profit/Loss Ratio: 0.65 |
|
BOLLINGER-RSI SCALPING STRATEGY |
■ M1 time frame ■ Forex Currencies
■ 8-10 daily trades |
■ Bollinger Bands (i) 12 Periods (ii) Deviations 2 (iii) Shift 0 RSI The standard settings (14,9) |
■ Take Profit: 5-7 pips ■ Stop-Loss: 10 pips ■ Profit/Loss Ratio: 0.5 / 0.7 |
|
THE STOCHASTIC SCALPER STRATEGY |
■ M5 time frame ■ Forex Currencies ■ Volatile Commodities ■ Volatile Stocks and Indices ■ 10-15 daily trades |
■ Stochastic Oscillator Settings at 10,3,3 ■ Simple moving average (SMA) 200 periods |
■ Take Profit: 20-30 pips ■ Stop-Loss: 20-30 pips ■ Profit/Loss Ratio: 1 |
THE STOCHASTIC SCALPER TRADING STRATEGY
An easy-to-use scalping strategy that combines a SMA for trend identification and the Stochastic as a trigger. It can be used for trading any financial asset.
TRADING STRATEGY
■ Style: Scalping Strategy
■ Name: The Stochastic Scalper Trading Strategy
FINANCIAL ASSETS
■ Forex Majors | ■ Metals and Energy | ■ Stocks | ■ Indices
TIMEFRAME
M5 timeframe (5-Minutes)
■ 10-15 daily trades
INDICATORS & SETUP
This strategy combines the Stochastic Indicator with a Simple Moving Average of 200 periods.
■ Stochastic Oscillator
-Settings at 10,3,3 instead of the standard-setting (14,3,3)
■ Simple moving average (SMA) with settings:
-200 periods
TRADING SIGNALS
This is how you may implement the Stochastic Scalper Strategy.
The 200 SMA is used as a simple tool for determining the master trend. If the price chart is above the 200 SMA then there is an Uptrend while if the price chart is below the 200 SMA then there is a Downtrend.
■ (↑) Long Trades
Each time the price of an asset is above the SMA 200 and the Stochastic is recovering from 20 you get a Long Trading Signal (buy the market).
■ (↓) Short Trades
Each time the price of an asset is below the SMA 200 and the Stochastic is falling from 80 you get a Short Trading Signal (sell the market).
TRADING ORDERS
■ Take Profit: 20-30 pips | ■ Stop-Loss: 20-30 pips | ■ Profit/Loss Ratio: 1
In the chart, we have implemented this strategy on EURCAD but it is better to prefer currencies that are traded in narrower spreads.
CHART: The Stochastic Scalper
■ FIND ALSO: ► EA BUILDER TESTER | ► GET STARTED WITH FOREX | ► TRADE SYSTEMS
■ STRATEGIES: ► DAY-TRADE | ► SWING-TRADE | ► SCALPING STRATEGY | ► BINARY STRATEGIES
■ FOREX RATINGS: ► DIRECTORY | ► TRADE SPREADS | ► FOREX SCALPING | ► SWAP RATES | ► FUNDS SAFETY
■ The Stochastic Scalper Trading Strategy
ForexExperts.net ©
BOLLINGER-RSI SCALPING STRATEGY
Trading the Forex Majors (preferably EURUSD and GBPUSD) using the Bollinger Bands and RSI.
TRADING STRATEGY
■ Style: Scalping Strategy
■ Name: Bollinger-RSI Scalping Strategy
FINANCIAL ASSETS
■ GBPUSD best (or EURUSD)
■ Use this strategy in other Forex assets given tight spreads in order not to disturb your P/L Ratio
TIMEFRAME
M1 timeframe (1-Minute)
■ 8-10 daily trades
INDICATORS & SETUP
This strategy is applied using the Bollinger Bands and RSI.
Setting the Bollinger Bands and RSI:
■ Bollinger Bands
Use the following settings:
(i) 12 Periods instead of the standard 20 periods
(ii) Deviations 2
(iii) Shift 0
RSI
-The standard settings (14,9)
TRADING SIGNALS
This is a simple scalping strategy combining two popular indicators:
■ (↑) Long Trades
When GBPUSD reaches the lower Bollinger Bands you prepare to trigger a Long (bullish) trade.
RSI-30 is the trigger for a Long Trade
■ (↓) Short Trades
On the contrary when GBPUSD reaches the upper Bollinger band you prepare to trigger a Short (bearish) trade.
RSI=70 is the trigger for a Short Trade
TRADING ORDERS
Here is how we set the Bollinger Scalping Strategy:
■ Take Profit: 5-7 pips | ■ Stop-Loss: 10 pips | ■ Profit/Loss Ratio: 0.5 / 0.7
CHART: Bollinger-RSI Scalping
■ FIND ALSO: ► EA BUILDER TESTER | ► GET STARTED WITH FOREX | ► TRADE SYSTEMS
■ STRATEGIES: ► DAY-TRADE | ► SWING-TRADE | ► SCALPING STRATEGY | ► BINARY STRATEGIES
■ FOREX RATINGS: ► DIRECTORY | ► TRADE SPREADS | ► FOREX SCALPING | ► SWAP RATES | ► FUNDS SAFETY
■ Bollinger-RSI Scalping Strategy
ForexExperts.net ©
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