Forex Scalping Strategies

Forex Scalping Strategies

Forex scalping is a popular trading style nowadays.

Forex scalping is a trading strategy where a trader will purchase a currency pair and then hold on to it for a tiny period of time in order to try to make a profit. A Forex scalper will try to make a lot of trades and earn a tiny profit each time. He will buy and sell currencies fast, using a small stop loss and a small target.

Forex Scalping Strategies

If you are scalping Forex right now, or you are thinking of doing so in the future, then there are distinct rules that you have to abide by. You have to know these universal rules to survive. When you’re trying to scalp the Forex market, there are certain challenges that you don’t encounter when you are trading over larger time frames. First due to the high number of trades, your stress level is higher than a longer term trader.

Forex Scalping Strategies

Since in Scalping you trade so many times a day, you need to spend hours scanning the charts, looking for good opportunities and you need to act fast. Every second counts. When you scalp the Forex market, you have to watch out for all the professional traders and institutions. They have resources, power and experience and they will be competing with you. Your loss will be their profit.

Forex Scalping Strategies

One of the best scalper strategies is to try to catch tops and bottoms during choppy markets. Most traders wouldn’t dare scalp during choppy markets, but for this strategy that’s the perfect market. During a choppy or range bound market, oscillators are more effective in signaling tops and bottoms.Stochastics signals for example are more effective during these market conditions, while they fail on strong trending markets.

Forex Scalping Strategies

If you’re familiar with Stochastics you probably know that on a strong trend Stochastics can go to overbought and stay there for a long time. But if you look to Stochastics during a choppy market, you see how good they are in pointing tops and bottoms.

Forex Scalping Strategies

The first question you have to put to yourself when you are going to scalp choppy markets is when are the choppy, also called ranging markets most likely to happen. The best times for scalping the market are during off-hours trading between 7:00 AM to 8:00 AM and 3:00 PM to 7:00 PM EST . These timeframes might seem a little weird, but they’re actually the best timeframes.

Forex Scalping Strategies

Less market activity usually ends up in choppy markets. Since choppy markets are the goal, though, then we want to trade during predictably choppy times. When the banks aren’t moving the markets, it’s the best time for currency pairs to become choppy and start moving in a sideways direction in a tight range. It’s the tight range that makes for the most sought-after scalping environment.