Forex Scalping Strategy Explained

How to Scalp Forex

Now that we have an understanding of the basics of scalping, let’s look at practical applications. The most common time frame for scalping currency pairs is between 1 and 15 minutes with 1 and 5 minutes being the most common scalping time frame used by traders. Based on personal preferences, and how well you can work, you can try out the time frames to see which one works best for you.

So, to properly scalp Forex, you need to develop trading strategies based on technical indicators and favourable trading conditions. Then, once you see an entry trade, you have to go for it; if you see an exit signal, probably after a profit has been made, you may close the trade. 

Forex scalping strategies and techniques

Regarding Forex scalping strategies and techniques, one of the most effective is to compare the primary time frame for trading with a separate chart and a different time frame. For example, if you use a five-minute time frame to scalp currency pairs, you can then consult a ten-minute chart to check any new signals. 

Another Forex scalping strategy to take into consideration is attaching a stop-loss to every position opened by you. The use of a stop-loss helps you eliminate the risk of generating losses in short order. This is important, especially when your Forex scalping method involves multiple currency pairs. The use of technological resources available on your platform of choice can also help improve your trading.

Once you have developed a working pattern, the best thing for you to do is automate your scalping method, where you not only have a working system but one that pays. With any working system, you have to keep on improving your working pattern over time.

Note: these Forex scalping strategies and techniques should only be automated when they have performed well over a reasonable period. 

So, moving forward as we have throughout this article, here are some Forex scalping techniques:

Inside Day Breakout

Inside day patterns apply to many systems including candlesticks, such that the present high and low range is between the increasing and decreasing range of the previous day, indicating unpredictability and volatility. There are many daily inside day formats that indicate deductions in continuous instability, leading to a substantial increase in the possibility of a break. As a Forex dealer, you need to construct patterns and plans based on the inside day breakout concept, making use of the inside bars on a day-based chart time. The proper use of the Forex scalping strategy is a rewarding one.

News Fades

When certain numbers are released on the news into the market, the market becomes irrational. Some of the factors that make the market irrational are employment figures, non-farm payment data, and gross domestic products (GDP). When these new are released, they are followed by a moment of high levels of unpredictability. This is a period of quick gains that lasts for only about 15 minutes, after which prices would revert to previous points before the news release.

The One-minute Scalping Strategy

As we know, scalping involves opening many trades that last for minutes or even seconds. However, there are now some scalping strategies developed by professional traders that are now used by many other traders. One thing we have to highlight before going forward with a sample of the scalping strategy is that even though these strategies are helpful, you should use them as a foundation for making your setup.

The one-minute scalping strategy is a simple FX strategy for beginners, which is popular for enabling high trading frequencies. So, how does this strategy work? 

1. Set the time of your chart to one minute.
2. Make sure the default indicators listed below are applied to your chart

1. Stochastic with 5, 3, and 3 periods.
2. Exponential moving average (EMA) with periods of 50 and 100.

You can also indicate your EMA lines with different colours, making it easy to tell the difference from other indicators. With the application of the indicators, the next thing to do is review the signals needed for opening long and short positions using the simple scalping technique in Forex.

Short orders: 

• To know when to use short orders, you have to use the same strategy indicators, but only in reverse. 
• The stochastic should be below the 80 level.
• The 50 EMA indicators should be below EMA 100 with the spot rate also below..