It is continually beneficial to change with the trend, at least if you are a beginner scalper. To find out the trend, set up a weekly and a day by day time chart and insert trend lines, Fibonacci levels, and moving averages. These are your “lines in the sand,” so to speak, and will characterize guide and resistance areas. If your charts show the vogue to be in an upward bias (the fees are sloping from the backside left of your chart to the top right), then you will favor to purchase at all the support levels should they be reached.On the different hand, if the expenses are sloping from the top left down to the bottom right of your chart, then seem to promote each time the rate gets to a resistance level. Depending on the frequency of your trades, exceptional kinds of charts and moving averages can be utilized to help you determine direction.
In the instance above, the weekly chart suggests a robust upward bias of the EUR/USD. The charge ought to be heading again to a goal of 1.4280, the previous high on November 4, 2010.
The every day chart shows the rate has reached the 127.6 Fibonacci extensions, at about 1.3975. Clearly, there is a opportunity of a pullback to the trend line someplace in the neighborhood of 1.3850. As a scalper, you can take the short facet of this change as quickly as your shorter-term charts verify an entry signal.
2. Prepare Your Trading Charts
A forex scalping device can be either manual, the place the trader looks for alerts and interprets whether or not to purchase or sell; or automated, the place the trader “teaches” the software what signals to look for and how to interpret them. The timely nature of technical analysis makes real-time charts the tool of choice for forex scalpers.
Set up a 10-minute and a one-minute chart. Use the 10-minute chart to get a feel of the place the market is trading currently, and use the one-minute chart to absolutely enter and exit your trades. Be certain to set up your platform so that you can toggle between the time frames.
Trading System
In the device proven here, and there are many different systems you can use to alternate profitably, we’ve included a three-period RSI with the plot courses set to 90% and 10%. Only trades on the short side once the RSI crosses over the 90% plot guide, and the lengthy side as soon as the RSI reaches under the 10% plot guide, are entered. To nuance the signal, it’s first-rate to wait for the 2nd crossing into either of the two zones (only take the trade if the RSI goes into the zone – both the 10% for longs or 90% for shorts – on the second consecutive attempt.
Now, earlier than you follow the above system, check it using a exercise account and preserve a record of all the prevailing trades you make and of all your dropping trades. Most often it is the way that you manipulate your trades that will make you a profitable trader, rather than automatically relying on the system itself.
In different words, stop your losses quickly and take your earnings when you have your seven to 10 pips. This is a scalping method and is not supposed to keep positions via pullbacks. If you find that you can control the system, and you have the capacity to pull the trigger quickly, you might also be able to repeat the manner many times over in one trading session and earn a respectable return.
Remember that too plenty analysis will cause paralysis. Therefore, exercise the methodology until it is automatic for you, and even boring due to the fact it turns into so repetitive. You are in the commercial enterprise of scalping to make a profit, now not to enhance your adrenalin or feel like you are playing in a casino. Professional merchants are now not gamblers; they are speculators who comprehend how to calculate the risk, wait for the odds to be in their want and manage their emotions.
When to Scalp and When Not to Scalp
Remember, scalping is high-speed buying and selling and therefore requires plenty of liquidity to make sure speedy execution of trades. Only change the predominant currencies where the liquidity is highest, and only when the quantity is very high, such as when each London and New York are trading. The special factor of buying and selling forex is that character investors can compete with massive hedge cash and banks—they simply need to set up the proper account.
Do now not scalp if you do now not feel focused for something reason. Late nights, flu symptoms and so on, will frequently take you off your game. Stop trading if you have a string of losses and provide yourself time to regroup. Do not try to get revenge on the market. Scalping can be fun and challenging, but it can also be worrying and tiring. You should be positive that you have the persona to indulge in high-speed trading. You will research a lot from scalping, and then by slowing down, you might also locate that you can even emerge as a day dealer or a swing trader because of the confidence and exercise you might also get from scalping. Remember though, scalping is now not for everyone.
Always keep a log of your trades. Use screen capture to record your trades and then print them out for your journal. It will instruct you a amazing deal about trading and even greater about yourself as a trader.