Forex Scalping Strategies – A Guide to Scalping Forex

In the fast-paced world of Forex trading, scalping trading stands out as a thrilling strategy for those who love quick action. Forex scalpers thrive on short-term price movements, often within a single trading session.

They use scalping strategies, focusing on currency pairs like EUR/USD and GBP/USD, to make a series of quick trades. By leveraging technical analysis and tools like moving averages, scalpers can swiftly interpret market trends and react.

A key aspect of this approach is risk management. Scalping in the Forex market involves a higher number of trades, which increases the risk of losing trades. To safeguard their positions, savvy scalpers always set stop losses. This strategy isn’t just about making a large number of trades; it’s about making smart, calculated moves in a short time.

Trading Forex with a scalping strategy requires a keen eye for market dynamics and an ability to act quickly. It’s a trading style that suits those who can handle a fast-paced environment and make quick decisions. So, if you’re ready to scalp in the Forex market, prepare yourself for an exciting and challenging journey!

Before we move on to the beginner’s guide of the best scalp strategies, let’s see what Forex scalping really mean, shall we?

What does Scalping Mean in Forex ?

Scalping in Forex stands for the short-term strategy which goal is to make a significant profit out of tiny price movements. Forex scalping is a trading style used by forex traders. It involves buying or selling a currency pair and then holding it for a short period of time .

It’s essential to know that this strategy can magnify profits but losses too if the market doesn’t move in the right direction to the bet. Because of that, during any trading session, Forex scalpers must always check the need to see if there are any changes.

Now, let’s get started with the best Forex Scalping strategies for you!

Indicators for Forex scalping

Here are some of the best technical indicators that are commonly used in scalp trading strategies:

1. Moving Averages (MA): Scalpers often use moving averages like the Simple Moving Average (SMA) or Exponential Moving Average (EMA) to identify the trend direction and potential reversal points. Short-term MAs (like 5, 10, or 20-period) are more responsive to price changes and are preferred in scalping.
2. Stochastic Oscillator: This momentum indicator compares the closing price of a currency to its price range over a specific time period. It’s useful for identifying overbought or oversold conditions in the market, allowing scalpers to anticipate potential reversals.
3. Relative Strength Index (RSI): Similar to the Stochastic Oscillator, the RSI helps in identifying overbought and oversold conditions. A typical setting for scalping is a 14-period RSI.
4. Bollinger Bands: These bands provide a visual of the volatility in the market. Scalpers use them to capture quick profits during high volatility when the price moves outside the bands.
5. MACD (Moving Average Convergence Divergence): This is a trend-following momentum indicator that shows the relationship between two moving averages of a currency’s price. Scalpers use MACD to identify potential buy and sell signals.
6. Parabolic SAR (Stop and Reverse): This indicator is useful for determining the direction of price movement and finding potential reversal points.
7. Pivot Points: They are used to identify potential support and resistance levels. Scalpers use these points to make quick decisions on entry and exit.

 

Best scalping Strategies

#1 MagicSteam Strategy – the most profitable one

Perhaps the most crucial Forex scalping strategy is the MagicSteam strategy, mainly because it’s considered to be the most profitable one. It encompasses improving future trends forecasting. The main issue regarding this strategy is that it’s based on stable trends and less common than flat, which involves fluctuating prices.

If you choose this strategy, you can trade in any market, at any time you like. The time frame for the MagicSteam method is M5. It’s very crucial not to perform more than two operations on a paired device.

As a trader using this particular strategy, do not expect a large number of signals since the data of all parameters collide.

#2 Bamboni Scalping Strategy – long and short trades

When speaking of the so-called “Bamboni strategy,” we are talking about one of the most common Forex scalping strategies that involve six indicators at once. These indicators are:

• Paramon Scalp;
• Fisher Yur4ik;
• Signal Bars 6;
• EAtrend using i_trend;
• Fractals;
• SMA (100) and SMA (200)

You need to know that indicators are installed on one chart with the M15 timeframe. Trades are opened in two specific directions, bullish or bearish, while the most volatile trading instruments are selected for trading.

The signal for the long position

The signal for opening a “long position” includes the following conditions:

• The price chart crosses the SMA (200);
• The famous SMA line (100) is above the SMA line (200);
• The green line EAtrend strikes the red one;

Short trade conditions

On the other hand, the so-called “short trade” is opened under the particular, opposite conditions:

• The well-known SMA line (100) is below the SMA line (200);
• The price chart crosses the SMA (10 0);
• The red line EAtrend strikes the green one.

#3 Two Sliding – reliable and simple trading system

Two sliding Forex scalping strategy is famous as the reliable and simple trading system with a small set of tools. The basis of this strategy is very original. A position is opened once two MA lines diverge. While trading, traders are using simple moving averages with 20 and 1 periods.

M5 timeframe is where trading is happening, while the main goal is not to hold the open position longer than 1 hour.

Buy order signals

Here are the conditions that serve as a signal for opening the famous “Buy” order:

• The price curve became the 20-period MA and then broke the upper MA 10 line;
• Both diverging lines MA are directed upwards.

Sell order signals

On the other hand, we have the sell order signals:

• The price curve will go to the 20-period MA and then break the lower MA 10 line;
• Both diverging lines MA are directed downward.

In this case, the stop loss and profit are set at 10-15 points from the market entry point. Speaking of the main advantages of the Two sliding strategy, we’d point out the following ones:

• The low number of false signals
• Simplicity

#4 The Five-minute Strategy – trades in USD and EUR currency pair

Another straightforward and profitable strategy in Forex is the Five-minute strategy. Trades are conducted in currency pair USD and EUR. All traders must meet the three following conditions before deciding to choose to buy a financial instrument:

• The price has to break the BB line from below and cross half the distance to the blue line
• RSI needs to be above 70
• The stochastic has to be at least 80 and then distributed

How can a trader sell the currency?

If a trader wants to sell a particular currency, he must consider opposite conditions. It means that the RSI has to be below level 30. Also, the stochastic isn’t above level 80. It means that a blue line needs to be crossed with the red one from below.

In conclusion, there’s also the case that the price line could cross the BB line above and lie between yellow and blue stripes.

The Bottom Line

To cut a long story short, it’s good to remember that they are in steady demand among Forex professionals and novice traders regarding Forex Scalping strategies. The potential of these strategies is to allow a person to build up capital on small deposits.