Finding the best forex strategy is a mystery for beginners. There are many forex trading strategies that can be used according to your capital availability and time management. The major forex trading strategies are day trading, swing trading and of course scalping.
Scalping strategy is for the forex trader who just love to keep eye on the computer, enjoys making many trades in a day and who don’t want to take risk of overnight change in the forex market. It is also famous as Forex 1-minute trading strategy which is described later in this article.
Before indulging into to how to use scalping strategy in forex trading lets find out the basic definition of scalping.
Scalping is kind of day trading. You can say it is the ultimate form of day trading. In day trading you open and close your position within a day. In scaling you do that in 1/100 time of day trading. The opening and closing of the position in scalping are within minutes or less. A forex trader does many trades in a day while using scalping strategy.
Forex 1 minute trading strategy is the strategy that is used by many experienced forex traders. If used properly and with adequate knowledge you can earn a huge profit with Forex- 1-minute trading strategy. It is a powerful source to keep an eye on the real-time value of exit and entry point of trade.
There is no specific requirement in the 1-minute forex trading strategy other than keeping a focused eye on the computer, having a bit big deposits and dealing with a broker for the commission. But if you don’t have the capability to look for every minute change and don’t have a few hours to invest then scalping strategy is not for you.
Forex 1 minute strategy is quite effective for beginners. They just have to learn how to use small spreads and commissions and spend a lot of time on the computer.
In this article, you will learn how to make a trade on daily basis, what are the key strategy to incorporate in forex trading, how to maximize your time and efforts in making the biggest impact possible when trading at the microeconomic level.
In forex trading, you can trade with any currency pair of your choice but it would be better if you use the currency pair with the lowest spread in the scalping strategy.
It is recommended to set up your terminal with indicators such as 100 EMA, 50 EMA(exponential moving average), and Stochastic (5,3,3) if you are working in the highly volatile market.
Try to minimize the risk as minimum as possible in the scalping strategy. Therefore you should try it first in a demo account. Well, practicing any forex strategy in a demo account is always recommended by every experienced forex trader and brokers.
Here are the important Forex-1 minute scalping strategies.
This is the trading strategy to make a purchase action. To enter the in buy long order make sure that Stochastic Oscillator is below the 20 levels. The first EMA(50) should be above 100(EMA) and wait till it comes to the EMAs.
In this strategy try to keep remember that you are performing a short term strategy and therefore it is utmost important to play it safe. In the short term strategy, you should always try to gain on 8-12 pips. This is the idea put to take profit. The stop loss is also important to consider and try to make it around 2-3 pips.
For short selling wait for the time when Stochastic Oscillator is above the 80 levels and 50 EMA is below the 100 EMA. Wait until the price comes back to its EMAs. Similar to above the target price should be to make a profit of around 8-12 pips from the entry point and same stop loss of 2-3 pips below the last swing point.
Every strategy in trading has some advantages and disadvantage of its own, Forex-1 minute scalping strategy is also the same. A wise forex trader is always of the pros and cons of the strategy he uses.
Below are some important advantages and disadvantages of Forex 1 minute strategy.
The risk is less- It is not like it is risk-free and there will be no loss. As you know in scalping, the duration of holding the position is very small therefore the changes or loss due to an unpredictable event in forex market get less time to occur. This is the most effective advantage of scalping strategy.
Benefits of Market Sleep Hours- The Forex 1 minute strategy is known as a profitable trading strategy for a reason. The scalping strategy happens in small movements and this movement can also happen in the market sleep hours. Therefore you can enjoy the benefit of non-stop trading in this.
Time-Consuming– If you have to make 100 trade all day then you have to concentrated mind to the trade. It requires a minimum of 3-4 hours to sit in front of the computer and set trade, analyzing the chart. If you have a family to take care and a full-time job then scalping strategy will next to impossible for you.
High Deposit– If you want to make a profit of 8-12 pips you will need to deposit a large amount for the result. To earn some profit you might need to make multiple trades of $1000. It is not necessary that all the 100 trade you have made will be successful therefore you need to have a large deposit to use FX- 1-minute scalping strategy.
There more disadvantages such as your mental health will be affected by the time consuming 2-3 hours chart analysis, lack of proper information can also create a problem.
It’s amazing that Forex 1 minute strategy requires long hours in trading. In selling and buying 2-3 pips and making a profit in small price movement, you can trade a large volume in FX 1-minute scalping strategy.
This strategy is very effective and fast if a forex trader is fully aware of the basics and fundamentals of chart analysis.
If you are new to this, go open a demo account and start practicing scalping. You can also use expert advice from MMF Solutions forex trading expert team if you want to make profit in forex trading.