Scalping Short Term Forex Trading Strategy

Scalping Short Term Forex Trading Strategy

Scalping Short Term Forex Trading Strategy Many novice traders find scalping to be a very appealing Forex trading strategy. The scalping strategy is an intraday trading strategy and it allows a successful trader to make a lot of money in no time. It is so appealing because it allows for a relatively low risk and can yield very big profits. Although scalping is considered a low risk strategy, it relies on the trader being very attentive and composed as emotions can get in the way when it comes to this Forex trading strategy. Traders who choose to use this strategy will also have to pay close attention to the market, especially during peak trading hours throughout the day. What is scalping? Scalping is a Forex trading strategy which relies on placing a large number of very short term trades. Each trade on its own doesn’t have the potential to bring in big money but as a whole, if played right, they can add up to quite a lot. Trades are constantly opened and closed and can last as little as just a few seconds or minutes. The recommended charts to use in scalping strategy are 1 minute and 5 minute charts. Some traders also use 15 minute charts but anything above 15 minutes would not be considered scalping. Take a look at a scalping example on the chart (1 min. gbp/jpy chart): Not all traders will have success with scalping as it requires certain skills and a lot of self discipline. Beginners should not try this Forex trading strategy until they have acquired some experience and traders who have...
Bollinger Bands Indicator Explained – What are Bollinger Bands?

Bollinger Bands Indicator Explained – What are Bollinger Bands?

The Bollinger Bands indicator, named after its creator John Bollinger, is a popular member of the “Trend” family of technical indicators. Bollinger designed his bands in order to measure if prices were high or low on a comparative basis with relative volatility. Traders use the bands to anticipate increases and decreases in volatility that signal imminent trend changes are on the way. The Bollinger Bands indicator reflects upon trend information by combining a moving average with the underlying currency’s volatility. The indicator looks like an expanding and contracting envelope drawn about the pricing indicia on a typical chart. The two boundary lines represent two standard deviations of distance above and below the moving average. Over time, the bands act like an accordion playing music Bollinger Bands Formula The Bollinger Bands indicator is common on Metatrader4 trading software, and the calculation formula sequence involves these straightforward steps: Calculate a Simple Moving Average of price behavior (Standard period setting is “20”, but can be customized to suit your taste); Calculate “Upper Limit” line by adding “2” standard deviations to the SMA (Standard setting is “2”, but can me modified); Calculate “Lower limit” line in similar fashion to “Upper Limit”. Software programs perform the necessary computational work and produce asset of Bollinger Bands as displayed in the following chart: The Bollinger Bands indicator consists of the three fluctuating lines designated in “blue” in the above chart. In the example above, the Upper Limit and Lower Limit Bollinger Bands encompass the candlestick formations and the “blue” SMA or midpoint line. When the bands contract, price consolidation is occurring and volatility is low. These...

Forex Indicators : an important tool in optimizing trading strategy

Forex Indicators: an important tool in optimizing trading strategy Forex indicators are data points that indicate the direction in which a currency will move. Forex indicators are used extensively by investors to optimize their trading strategies. These indicators are used across timeframes and currency pairs. The right mix of a variety of indicators may help one formulate an effective trading strategy that succeeds in a dynamic and fast-moving currency market. Forex Indicators: types Broadly speaking, Forex indicators can be classified into two categories: Leading technical indicators: These suggest the probability of what is likely to happen in the Forex market with respect to the direction in which a particular currency pair is headed or where a currency pair price would reach. Lagging technical indicators: These indicators keep traders abreast of what has already happened in the Forex market. These indicators are useful in identifying whether the market is moving sideways or is trending up or down. Forex Indicator Tool: the ones to look out for Some of the key Forex indicators are: Simple Moving Averages (SMA): This indicator tells a trader the average price for a particular time period, for example five minutes, 20 minutes, one day, etc. Each of the chosen periods has the same weight. Exponential Moving Average (EMA): The averages, under this indictor, are calculated with the recent Forex rates carrying a higher weight in the entire average. This is done in order to obtain a more accurate indication of trend direction. Relative Strength Index (RSI): It is a price-following oscillator that has a range of 0-100. One of the more frequently used methods of analyzing...
Trading Pegged Currencies Low Risk Fixed Currency Trades

Trading Pegged Currencies Low Risk Fixed Currency Trades

Trading Pegged Currencies Low Risk Fixed Currency Trades A fixed or pegged currency is one where the currency’s value is matched to that of another asset. The asset may be a single currency, or it may be a basket. The fixed rate will be determined by central banks, and will be defended and maintained in order to protect economic stability. In this article we’ll first go through advantages and disadvantages with pegging a currency, then we’ll give you strategies for how you can profit on trading pegged currencies, and finally we’ll discuss real cases in the form of the Saudi Riyal and the Danish Krone. Why do central banks peg currencies? Fixed exchange rate mechanisms can be introduced for a number of reasons, and offer a number of advantages or disadvantages for the economy of the nation which utilizes them. A pegged currency can be very useful in combating inflation in an environment where the public has lost confidence in the nation’s economic policies, and prices keep rising uncontrollably as a result. The peso was pegged to the US dollar by Carlos Menem to stop rampant inflation in 90’s Argentine. It may be temporarily introduced to protect an economy from currency volatility that is caused by speculators or event shocks. In response to the Asian Crisis of 1998, and speculator attacks, Malaysia had to keep the ringgit pegged to the dollar for seven years. Another reason for maintaining a fixed currency is to defend the profits of exporters in a nation against normal currency fluctuations which make predictions difficult. Hong Kong was one of the nations that maintained such...

Scalping Short Term Forex Trading Strategy

Scalping Short Term Forex Trading Strategy Many novice traders find scalping to be a very appealing Forex trading strategy. The scalping strategy is an intraday trading strategy and it allows a successful trader to make a lot of money in no time. It is so appealing because it allows for a relatively low risk and can yield very big profits. Although scalping is considered a low risk strategy, it relies on the trader being very attentive and composed as emotions can get in the way when it comes to this Forex trading strategy. Traders who choose to use this strategy will also have to pay close attention to the market, especially during peak trading hours throughout the day. What is scalping? Scalping is a Forex trading strategy which relies on placing a large number of very short term trades. Each trade on its own doesn’t have the potential to bring in big money but as a whole, if played right, they can add up to quite a lot. Trades are constantly opened and closed and can last as little as just a few seconds or minutes. The recommended charts to use in scalping strategy are 1 minute and 5 minute charts. Some traders also use 15 minute charts but anything above 15 minutes would not be considered scalping. Take a look at a scalping example on the chart (1 min. gbp/jpy chart): Not all traders will have success with scalping as it requires certain skills and a lot of self discipline. Beginners should not try this Forex trading strategy until they have acquired some experience and traders who have...

Forex Indicator Advanced Bollinger Bands Method

Forex Indicator Advanced Bollinger Bands Method This is an advanced bollinger bands indicator with several moving average methods and applied prices to choose from. Traders can choose simple, exponential, smoothed and linear weighed moving averages. Available price methods: close, open, high, low, median, typical and weighted. Feel free to experiment with all indicator input settings. Trading Signals Buy signal: In up trending markets – look to buy near the lower Bollinger band. Sell signal: In down trending markets – look to sell near the upper Bollinger band. Indicator Preferences Currency pairs: any Time frames: any Trading sessions: any Download Download the advanced-bollinger_bands.mq4 indicator. Configurable Indicator Options Moving average method, applied price, bands period, bands shift, bands deviations,… EUR/USD H1 Chart...

Resistance Forex Scalping and Method High Frequency Dynamic Support

Resistance Forex Scalping and  Method High Frequency Dynamic Support Back to the basics of trading with high frequency dynamic support and resistance forex scalping. This method requires to have the SupportResistanceLevels indicator installed on your Metatrader charts. You can download the strategy below. We’re typically looking for 7-10 pips profit targets. Use this strategy on low spread currency pairs to maximize your profits! This method won’t work very well on higher spread currency pairs such as the GBP/JPY. Chart Setup Indicators: SupportResistanceLevels Preferred time frame(s): 1M Trading sessions: Euro and US Preferred Currency pairs: Low spread (max 2 pips) Download Download the High Frequency Dynamic Support and Resistance Forex Scalping Method for Metatrader 4. EUR/USD M1 Trading Example 3 Signals to scalp the EUR/USD pair were issued using the S/R dynamic method. All closed for 24 pips total profit. Trading Rules Buy Rules: Wait for the 1 minute candlestick to close above resistance (red dots) Enter buy trade and place stop loss 7 pips below your entry. Price objective: exit the buy trade for 7-10 pips. Sell Rules: Wait for the 1 minute candlestick to close below support (blue dots) Enter sell trade and place stop loss 7 pips above your entry. Price objective: exit the buy trade for 7-10...