Scalping is forex trading strategy which is generally used on short time frames like one minute or 5 minute time frames to take small profits. The following is one of the scalping strategies. Use this strategy in London and US market timings as this is when the market movies in a trend most of the times. You can use this strategy from one or two hours before the London market as the market sometimes starts moving in a trend before one or two hours of the London market begins.
Time Frame: 1 Minute
- 25 period exponential moving average
- 50 period exponential moving average
- 100 period exponential moving average
Currency Pairs: Since scalping involves small profits in a smaller times like few minutes to an hour this technique is better for currency pairs that have small spread like EURUSD, GBPUSD etc.
Buy Entry: Enter long trade when the price crosses above the all the moving averages. When you get a 5 to 10 pip profit exit the trade. You can use the stop loss below the last low of the price. The following is an example of buy entry.
Sell Entry: Enter sell trade when the price crosses below all the moving averages. When you get a 5 to 10 pip profit exit the trade. You can use the stop loss above the last peak of the price. The following is an example of a sell entry.