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Thread: Scalping Strategies

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    Default Scalping Strategies

    Scalping:
    this is sort of quick trading where traders change their position from a few seconds to a few minutes (less than 5 minutes)
    Last edited by umaranjum; 03-27-2009 at 02:35 PM.

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    Quote Originally Posted by umaranjum View Post
    Here are Some 11 Scalping Strategies that I have found to be useful:
    where are they?

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    The purpose of scalping is to work out a few pips profit, the risk is limited and this is beneficial in accounts offering a high leverage.

    Suppose a trader invests 100000 EUR/USD, and for each pip, he might earn $10. Even a three pip would give him $30. It means, a few minutes of efforts, and $30 in your pockets

    Scalping with ADX:
    in this method, the minimum time is spent. You would need to know about the market trend
    To find out about the strength of the market trend, use ADX (Average Directional Index) indicator.

    When the readout of the indicator is below 20, go fishing, don't stay in forex for scalping

    If above 40, trade now!

    Bollinger Bands:
    Use this indicator to work out trends. If price surpasses the bands, it means continuation of current trend while bottom and top of outside band change to bottom and top made later insider bands suggest upcomming trend reversal

    News Release:
    Wait for important news to be released, keep your eye on the news and work out those which could shake the market.
    Before 15 minutes of news release, I would strongly suggest that you place both buy/sell orders 15 pips away from the current price.
    After the news effect the market, you would get benefit from either one, no need to know whether the price would rise or fall unexpectedly

    Another technique in this perspective is to do the same thing on mornings and at nights. There is a significant trend in prices during these times too
    Last edited by nonamer; 03-22-2012 at 03:32 PM. Reason: back to back post

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    I found this one somewhere, quite useful, though a bit technical:
    Trade the most active hours – London and New York.
    EUR/USD 5 min
    GBP/USD 5 min
    (optionally may also trade AUD/USD)
    SAR (0.01, 0.1) – on the chart
    SMA 8 – on the chart
    MACD (5, 8, 9) + SAR (0.01, 0.1) on this MACD
    SAR defines whether we go short or long. We will take only one type of trades according with SAR signals.
    Whichever SAR gives earlier signal – we take it. (Sometimes it can be “chart-SAR”, sometime “macd-SAR”)...

    Trading Rules:
    When we talk about “trend change” we mean small tiny trends that are actual for us scalpers on 5 minute chart. We do not want to know what is going on 15 min, hourly or even more so daily chart.

    With the first SAR dot appearing on the opposite side (the trend has changed) – open one “trial” position Stop loss -12 (spread not included), Take profit +5. Once profit target has been hit – look for the best that current price can offer and open three equal orders, Stop loss for all orders is -12 pips (without spread), profits will be taken next way:

    1st order – close in 5 pips and later constant re-entry-scalping with rules described below.

    2nd order – close on 14th (or 18th) SAR dot (whichever SAR got first 14 dots – just count them) – this gives us some relief that we have scored something. Also you may not wait till certain number of dots and just close second order where you fill it is a good gain to secure
    Another option: if you are familiar with waves and know what price retracement means, look to close 2nd order after the first, at most second clearly noticeble retracement and once the price has recovered and gave a strong move forward.

    3rd – this order remains open and it is our constant relief that we are always earning something as long as both SARs are in agreement that the trend is alive. We close 3rd order only with the first SAR dot (any of 2 SARs) appearing on the opposite side signaling of a reversal.
    Or if you feel it is enough for you – do not hesitate and close it earlier!

    We trade both currency pairs at once. In total we run 6 open orders maximum.
    EUR/USD and GBP/USD have over +90 in correlation which means they move simultaneously almost always. It helps to anticipate good or bad signs watching two pairs at once.

    If with the first “trial” entry we have loss, open next “trial” position only when both SARs have agreed on the trend. (You may always wait for 2 SARs to be in agreement before entering any trade, but then sometimes you will miss most of the price move).

    Now let’s move to our order # 1 which is going to be reopened to scalp the market with 5 pips in profit.
    Stop loss will remain -12 pips. Profit target +5 pips.

    Once hit 5 pips and we are on the same candle (price bar) set limit order on the same candle half way from the current price (this is not to be calculated, just approximately, also you may check previous candle extremes and set order accordingly).In other words, “half way” means half of the candle’s current body while the candle continues moving up and down).So, set half way below (for uptrend)/above (for downtrend) the recent price – what we want here is for the price to pull back, fulfill our order and bring us another 5 pips on the same spot. If it does not retrace – we will not worry as we have our two other orders gaining profits for us.

    If a new 5 min candle appears, then project (visually) possible future retracement/pullback close to 8SMA and set limit order there – in other words, make your limit order “sit” on the tip of 8EMA line). Reposition your limit order with each new candle.

    Now let’s play around 8 SMA. The price really “knows” this SMA.
    a) If most of the candle has closed above (uptrend)/below (downtrend) 8 SMA for the first time – buy/sell accordingly.

    b) For uptrend when price touches 8 SMA for the first time from above and current candlestick closes above or on 8 SMA – buy, but only if MACD’s histogram is not sloping down and about to cross 0 line or already below 0 line. If conditions are not met – sit and wait...

    ...And wait for the same MACD’s histogram to go below 0 line with the new candle and create a sharp turn (usually) or a rounding turn (not often). Enter on the close of the current candle after the sharp or rounding turn is spotted.

    c) Constantly watch the price approaching SAR dots as once they meet – SAR indicator will signal for the change of the trend with the new dot not matter what, therefore if spotted– prepare to exit – do not wait for the SAR as it will redraw signal only in 5 min interval – valuable time can be lost. Instead watch the price, find the best “offer” and exit early with minimum loss.

    If one currency pair is showing change in trend – e.g. got signal on SAR indicator, but the other does not – exit on both anyway. Pairs move simultaneously. So the other reverse signal is on its way to appear. You may find at times that EUR/USD pair usually moves slightly ahead of GBP/USD.

    d) If the price for the first time has breached 8 SMA and closed on the opposite side – start watching closely the next 3 candles: if it comes back, closes on your side and goes in your favor –OK, but if price comes back, closes on your side and soon after goes and “attacks” 8SMA again and closes on the opposite side – exit with all you orders at the first suitable moment, because it is a strong (about 80%) sign of the trend reversal.

    Once again the safest mode is:
    If two SARs are in disagreement – stay out. Once both are telling the same thing – get in.

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    Default

    I got some more, but they are still in testing phase I would keep this thread updated once I have ensured of their profitability.

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    ceestech
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    how effective is this strategy considerin that one does not say long in the market.

    Quote Originally Posted by ceestech View Post
    how effective is this strategy considerin that one does not say long in the market.
    althrough i forgot to add that this is one trading style i found effective when theres going to be a breakpoint.
    Last edited by nonamer; 03-22-2012 at 03:31 PM. Reason: back to back post

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    Good strategies and well explained but I find It very complicated We have to spent a long time testing it on demo before going in live. Hope that be a successful strategie.

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    All strategies needs to be tested on demo accounts before trying them on real accounts, so you can see their performances

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    ceestech
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    one most test it but i can say that for those who have other thing to do it is the very best for them the the profit is good also.

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    After testing a strategy, you would its performances based on the results you will get from it.

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    ascalping can be very profitable but also very risky as it is with big lot size contract. a trader should practise alot on demo to be good scalper

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    Scalping to me is the most high risk strategy. There are times when you loss all your orders from scalping due to wrong entries

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    Scalping is best suitable for a ranging market conditions. Scalpers can't get good profits from a trending market

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    even though scalping is a strategy that has a high level of risk but if the trader is doing is able to understand and be able to minimize losses it is not really a problem because that's to be able to make scalping the trader must be able to analyze quickly and accurat

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    Quote Originally Posted by umaranjum View Post
    Suppose a trader invests 100000 EUR/USD, and for each pip, he might earn $10. Even a three pip would give him $30. It means, a few minutes of efforts, and $30 in your pockets
    Yes but 30$ is nothing compared to the amount invested. If you had that amout of money, you wouldn't content yourself with 30$; you would be more greedy.

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