By Chris Donnell – Forex trading can happen in a number of verying ways. There are swing trades that take up to a week to anticipate the time to hold a stock. Your win rate for this strategy is less than 50%, and you have to keep yourself from risking to much to protect your investment, therefore your lot sizes aren’t very big. There are intraday trends that you can check every few hours. You have a much higher likelihood of winning with this strategy, and you can trade more lots as well, giving you a win percentage of over 50%, with tighter stops and almost 100 pips a day.
Forex scalping trading system will be covered in the following article. When a trade scalps, their hold times are very short, and there’s no more than a 30 pip difference on their trades. Your win rates can go through the roof, due to the sheer concentration you are paying your trades and lots! You have hold times of mere minutes to act, or sometimes it’s up to an hour and a half; you might not be able to do this if you are just trying out Forex trading to supplement your current income, and you have a full time job to cut into your free time.
You always have to minimize your potential losses no matter what trading you do, trying to keep your gains above your losses. When you scalp, however, you can be a little more relaxed in this philosophy, since you have a much higher win percentage if adequately performed. If you have 10 pip stops, your wins can be 10 pips as well. You won’t find it hard to get a 10 pip move within an hour, due to the sheer amount that is moved between all the major markets in any given day. For example, if you have 20 pip stops on a third of your winning trades, you can find it absolutely within your power to take some other losses and start risking more – since you really have your eye on the market on a regular level, you can see how the markets are doing and adjust your trades accordingly; this way, even if trades go bad, you can minimize your losses and even win out a little bit, preventing any potential loss of money!
In order to find out the currencies that will increase and decrease in value, I have a lot of tools at my disposal; for those of you who have typical charts, you might just want to view a daily chart and buy the currenc when the trend is up, selling it when it then takes a downturn.
Just figure out how the trend has been going and see how today fits in. You can find a chart of the past hour’s movement and look at the 20 period scale. Buy the currency if its daily trend is increasing above the average it had this morning. On the other hand, sell it if you find it moving in the opposite direction and the price goes down.
You then perform the EXACT entry and exit procedure. It’s not that hard to use the Filter setting on the hourly MA, as soon as you get your trades moving in a favorable trend. You need to be looking for spikes in the trend. Once it starts pulling back, look at the trendlines for both the high and low points. If you have a high trend and spike, keep watching for 15 minutes to see any changes, then make your own trendline on the high points. Buy once you see an increase in price, using 5 pip stops. When you want to sell, wait for the exact opposite maneuver to happen. Once your low trendline is broken, go on in.
You can also scalp by charting out profit targets and Fibonacci retracements. Trendlines can come in handy if you come across either support or resistance, or it goes beyond the trendlines.
50 tick charts and 2.2 Keltner channels are perfect for most traders, and is what I’d recommended. Get the lower band if you see an upward trend. The upper band should be sold if a downward trend is witness. Either way, once you buy or sell, exit the scalp trading.
About the Author
Chris Donnell is CEO of LeverageFX and will teach you our best Forex System in our Forex Classes. Signup for 2 Weeks Free on our website LeverageFX.
