Not only will you need to be switched on and watching for potential trades, but when you are in a trade you will need to be monitoring it constantly because the markets can change rapidly. Scalping is similar in many ways to day trading.
With both strategies you will be trading during the one session and not holding your trades. The main difference between scalping and day trading is that day traders will normally pick one or two trades to hold for the session. Day traders will often analyze their trades longer and will have a longer trade holding period.
Scalp traders are using much smaller time frames such as the 5 minute and 1 minute charts to quickly jump in and out of trades. Scalpers are relying on making profits from very small price movements in a very quick time, whereas day traders can be holding their trades for hours with far bigger pip gains.
One of the best indicators to scalp the markets is the moving average and in particular the exponential moving average or EMA. In the example below we can see the 8 period EMA has crossed the 21 period EMA and price is strongly trending higher leading to potential bullish long scalping trades.
A lot of the very popular and successful scalping trading strategies have the same things in common. When using a scalping strategy you want to look for a strategy that has;. The best scalping strategies will allow you to find many potential trading opportunities.
This will give you the chance to make many trades, but also weed out the bad setups. You should also be mindful of Forex pairs and other markets where there is a high cost to trade and high spreads. This will make it incredibly hard to be profitable when scalping. When scalping you will be using small stops and the best strategies will allow you to find large risk reward winning trades that will cover your losses and make you profitable.
The key to this 5 minute scalping strategy is finding a strong trend with a moving average crossover. When the 8 period moving average crosses the 21 period moving average and begins to widen we can begin to look for trades in the direction of the trend. In the example below; the 8 period exponential moving average crosses above the 21 period moving average and starts a strong trend higher.
Trades could then be hunted using other confluences such as using Japanese candlesticks for entry points or major areas of supply and demand. The stop loss could be trailed behind either the 8 or 21 period moving average depending on how aggressive you are with your trade management. As a breakout trader you are looking to enter a trade when price breaks a key level and make a profit as price continues on with the break.
See the example breakout trade below. Price at first is contained and rejects the resistance level. The breakout trade comes when price breaks through the resistance level. This allows for long trades to be placed and profits to be made as price moves higher. The best markets to make breakout trades are where there is a lot of market movement and volatility.
This will give you a better chance of seeing price explode through a key market level. When breakout trading you have uncapped profit potential. This means that unlike a strategy such as range trading where you are trading back into a support or resistance level, you are trading out of a support and resistance level. This allows you to make a trade that could run into a very large winning trade.
The example below shows exactly what happens when a breakout trade quickly turns into a fakeout. This happens when price attempts to breakout of a key level, but quickly snaps back and stops all of the breakout traders out. The most important thing to breakout trading and what new breakout traders often struggle with is first finding a major level.
You need to be able to first identify that the potential breakout level has been respected as a support or resistance level on multiple occasions.
See the example below. Before breaking out higher price had respected the obvious resistance level twice. This sets up a clear breakout trade when price moves up higher and looks to re-test the same level on a third occasion. Once you have found an obvious level that price has been contained within such as a key support or resistance level, then you can start looking for your breakout setups.
One of the most popular trading strategies is finding and making intraday breakout trades. The main thing you want to keep in mind when looking for intraday breakout trades is that you want to trade with the momentum on your side.
For example see the chart example below. Once you notice price has rejected an obvious support level on multiple occasions, then you can start looking for breakout trades lower.
0コメント