One of the most common Forex trading strategies is known as scalping. Not only is it a simple trading system, it carries low risk and can be performed in a very short span of time. The problem is, the margins have to pay for will often eat a large amount of your profits and the reward/ risk ratio is usually very low.
Many traders do not like scalping system. This may be due to the fact that they have not been combined with some more advanced strategies. In combination with other strategies, scalping can be more profitable and less risky in the long term. Before we discuss the more advanced strategies known as “alignment” and “martingale” strategies, it will help you take a closer look at the resale of himself.
In scalping, it is usually best to trade currency pairs with high volatility and low spreads. These include pairs such as EUR/USD, GBP/USD, EUR/USD and USD/JPY. It is also best to stay focused on the smaller time frame charts such as an hour or less. The best trading times for a scalper are usually at the intersection of the European/U.s. session and the U. S./ Asian session. Once you think you have “caught” the short-term trend, you can enter into a position. Just make sure that there are no major news events coming and you feel confident about your short-term trend.
Here is where some advanced strategies can help you in scalping. The first advanced strategy for scalping will be discussed in this article. It has to do with the alignment. A second strategy that is described in the following article entitled ‘scalping With Martingale Insurance.’ Something more is known as the Martingale strategy.
In this article we are looking to combine scalping with an alignment of two types of trend. As we all know, in the Forex market, sometimes the price in the short term the trend is different from the long-term trend. In this strategy, we have to make it clear that this is not a good time for speculation. This is because the trends are not in alignment and, when the short-term trend suddenly decides to re-align themselves with the long-term trend, you’ll begin to get a big problem.
Avoid trading against the long term trend and wait for the short-term trend to show signs of agreement. You can use the EMA of the day-to-day, and 1 hour charts to determine these trends, or you can use your own strategy for the determination of trends. Whatever you do, wait for both short-term and long-term trends are in alignment. This provides a good form of insurance as you begin your scalping. If you do not see the alignment of your trends, come back tomorrow and try again.
Remember, you are really only scalping so don’t be greedy when things are going in your favor. Get out at a 10-20 pip profit and call it a successful trade! Combine this with another advanced strategy that is described in the following article ‘scalping With Martingale Insurance.’ These are just one of the many Forex trading strategies that can really help you to make scalping a more profitable means trading.