Forex Scalpel by Glenellis show you Top 10 Scalping Methods. The best scalpers out there (traders who routinely earn 100-500 pips a day) have a hard and fast rule: If the trade goes against me, I GET OUT! Meaning they don’t hang on to a losing trade in the hopes that it will become a winning trade.
Author: J.J Glenellis
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Introduction- Forex Scalpel by Glenellis– Excerpts
What is Scalping
Simply put, scalping is a trading style where you enter into a trade with the express goal of exiting with a small number of pips in profit (usually 5-10 pips after paying the spread). For most traders, scalping is the preferred method of trading as it usually only takes a moment or two to reach your goal, and rarely do you have to ride out any big swings in price.
The best scalpers out there (traders who routinely earn 100-500 pips a day) have a hard and fast rule: If the trade goes against me, I GET OUT! Meaning they don’t hang on to a losing trade in the hopes that it will become a winning trade. They have a set number of pips they are willing to sacrifice, and if the price hits that number, they exit the trade.
If your goal is 5 pips per trade, and you let a losing trade run until you are 30 pips in the hole, you need to win 6 trades in a row just to get back to break even. So keep your stop loss set tight (5-10 pips plus the spread, in most cases).
Scalping Profit Targets
As I mentioned above, you want to set a target of 5 or 10 pips when you are scalping (and 5 is obviously easier to get to than 10, since you can’t get to 10 without getting to 5 first!) but your target should depend on how many pips your chosen method of scalping historically nets you.
In each of the methods I describe in this e-book, I tell you what kind of pip gain you can expect on average. But don’t just rely on my findings…use your own records to see if you should hold on to trades a little longer (or exit them a little earlier) to maximize your winnings when trading.
The beauty of scalping the Forex Markets is that if you re only looking for 5-10 pips per trade, you can actually trade at any time, day or night, when the market is open, and have a good chance at finding your trade setups and getting into profitable trades.
But like all other forms of trading, you are going to find more setups, and get more winning trades, if you trade when volatility is heaviest. This means starting trading at 1 a.m. eastern time (2 hours before London opens) and ending at 4 p.m. eastern time (when New York closes). This 15 hour time frame encompasses the best trading there is.
However, if you are forced by your job or other commitments to only trade the Asian session, you can still scalp from 7 p.m. eastern time until 3 a.m. eastern time. Just focus on the pairs that are usually the most heavily traded during that time frame: USD/JPY, AUD/USD, NZD/USD and EUR/JPY. Just pay close attention to the spreads on those
pairs to make sure you don’t get into a trade where your 5-7 pip gains fails to even cover the spread.
About the author
Download ebook Forex Scalpel by Glenellis
Top 10 Scalping Methods
Read more Forex ebook:
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- Five Guiding Principles of Trading Psychology
- The 25 point discipline for day trading