Forex scalping and day trading for beginners – tutorial

<h1>Basic info about day trading</h1>
<p>Scalping can be a good way to make money. Still, it is hard, but in this guide, I will teach you more about it.</p>
<p><strong>Remember:</strong> this guide contains ideas and information based on my experience. There is no one correct approach to scalping. Other traders may use a different set of tools, different strategies. You are responsible for your trading results. You have to take all that knowledge and test it on demo account or with smaller position size.<br />
Goal of this guide</p>
<p>The main goal is to teach you about scalping. I want you to build (and test!) your own strategy based on information from this post. Remember, scalping is much more than set of technical indicators. You need a complete strategy with money management, position management, rules of entry and exit. I will try to teach you all that things.</p>
<p><i>THIS GUIDE WAS PUBLISHED ON <a href="http://marketsurvival.net">MARKETSURVIVAL.NET</a>. DON’T SCRAP AND STEAL MY CONTENT. ALL RIGHTS RESERVED.</i></p>
<h2>About forex scalping</h2>
<p>There are some disadvantages when it comes to forex scalping:</p>
<ul>
<li>If you are scalping without EAs then you have to be in front of the screen most of the time.</li>
<li>Sometimes there is very little time to make a decision.</li>
<li>You have to follow the news, be ready to react to some unexpected news.</li>
<li>You invest with bigger leverage so it is much easier to lose money in a short time if you do not follow your trading plan and don’t cut losses fast.</li>
</ul>
<p>But there are also good sides.</p>
<ul>
<li>You do not close any positions over the night. You finish the day and you know how you did.</li>
<li>If you have a good strategy which is based on technical tools then you can automatic the whole strategy or part of it.</li>
<li>You can make big money in short time.</li>
<li>You can trade few hours per day (not always, but possible) for example during time with the best volatility.</li>
</ul>
<p>Scalping is not for everyone, but when you have a good discipline then it can be a good choice.</p>
<h2>Forex scalping or long term</h2>
<p>Both are great ways to trade and make good money. Form many years of my experience I can say that in long term trading you have much better chances to be profitable. The old truth is that the more you spend in front of chart more chances to make mistakes. With long term, you open a trade based on your entry criteria and you wait. You can keep trade open for few weeks or months or even longer.</p>
<p>It is not easy with scalping. It is a constant fight with you, with your emotions. And it is so much easier to lose money than let’s say by long term investing in stocks.</p>
<p>So yeah, for most people long term is a better option. There are many demo accounts. You can try your strategy and see if this is for you.</p>
<h2>Forex scalping vs swing trading</h2>
<p>Similar to long term, swing trading is also a better choice for most traders. In swing trading, especially on higher time frames, you can catch some really big moves. It doesn’t require you to be most of the time in front of a screen.</p>
<h2>Scalping on Forex vs Dax, SPX, and futures</h2>
<p>I prefer scalping on Forex. Markets are open longer (5 days per week x 24h) and it is easy to trade with even really big positions.</p>
<p>There are some other factors to consider.</p>
<p>I would say that there is more automated trading in Forex so it can be harder to trade. Also, in Forex you have pairs. You have to watch for news for both of them.</p>
<p>Still, it is possible to mix scalping and swing trading but it is recommended for people who mastered swing trading in a first place.</p>
<h2>Forex scalping and day trading for beginners – tutorial</h2>
<p><em>This is an introduction to day trading and scalping guide.</em></p>
<p>I wrote before that scalping and day trading are not the best way to start your trading journey. Still, if you really want to learn how to day trade I have few tips for you.</p>
<p><strong>One pair is enough</strong></p>
<p>Probably it will be some major pair. You want a pair with good trading conditions (volatility, low spread…). EUR/USD, USD/JPY, and few others are ok to scalp. Do not fall into a trap that more pairs you trade at the same time means you can make more money. It doesn’t work like that.</p>
<p>There are many pros of trading one pair. It is easier to follow economic data, to get familiar with price behavior during different sessions during a day. I highly recommend trying focus just on one FX pair.</p>
<p><strong>Small leverage</strong></p>
<p>You are a beginner so you want to learn more about scalping and trading during a day. There is no need to take a big risk – it is not a casino. Think about your trading strategy, money management, and other important things. Learn. Do not try to be some superstar of scalping from day 1.</p>
<p><strong>Different strategies</strong></p>
<p>Learn about different strategies. Do not fall into the trap of one correct approach. Some strategies work for some traders and for others don’t. You should try and test few different approaches. Maybe price action is for you or scalping with indicators. There are so many different ways to make money. Test them.</p>
<h2>Forex scalping for a living</h2>
<p>Is scalping and day trading, in general, a good way for a living? I do not think so. Not for everyone and what is most important – not for new traders.</p>
<p>There are few reasons for that.</p>
<p><img src="http://www.marketsurvival.net/wp-content/uploads/2017/12/trader-desk.jpg" alt="trader-desk" width="960" height="639" class="aligncenter size-full wp-image-2932" srcset="http://marketsurvival.net/wp-content/uploads/2017/12/trader-desk.jpg 960w, http://marketsurvival.net/wp-content/uploads/2017/12/trader-desk-300×200.jpg 300w, http://marketsurvival.net/wp-content/uploads/2017/12/trader-desk-768×511.jpg 768w, http://marketsurvival.net/wp-content/uploads/2017/12/trader-desk-480×319.jpg 480w" sizes="(max-width: 960px) 100vw, 960px" /></p>
<p><strong>Capital</strong></p>
<p>To be a serious scalper you need trading capital. Without capital, you will be only playing around with small leverage. Scalping is not easy, you have to be most of the time in front of the screen and it can be frustrating that you spend all that time to make few dollars.</p>
<p><strong>Experience</strong></p>
<p>Day trading and scalping are not best ways to learn about trading and get experience. On lower time frames things are happening fast. It is easy to forget about fundamental things like trend lines, support and resistance and many others. There is to little time for new traders to think about it. When you trade let’s say 1h time frame or 4h you have time to draw important support and resistance lines, to check the current trend, situation in the higher time frames and so on. <strong>You have time to make decision</strong>. You can think about it.</p>
<p><strong>Time</strong></p>
<p>As I mentioned it few times before, scalping and day trading are specific. Sometimes you must wait for a good setup for many hours. It is not a so simple that you trade for 1-2 hours a day and you are done. It doesn’t work like that. You have to watch things on your screen, it is a normal job. If you start scalping with little trading capital then it is almost sure that you will try to trade with too big positions because you want to make profit bigger than few dollars. If you do not have trading capital and experience, it is better to use that time to earn that capital somewhere else. You still can trade on higher time frames and learn about trading. You can come back when you have proper trading capital.</p>
<p><strong>Expectations</strong></p>
<p>This one is important. People have huge expectations when it comes to day trading and scalping. Maybe the reason for that is because of how many traders promote their courses like it is an easy way to get rich fast. I know one thing for sure – it isn’t.</p>
<p>Scalping and day trading are the most difficult areas of trading. You have to be in front of your screen most of the time, stress can be sometimes huge. It is easy to get depressed, to not follow your trading plan when you are losing.</p>
<p>It is really hard. Still, people believe that this is a fast and easy way to make money. They are wrong. I know many traders who make very good money and they trade only 1h+ time frames. So it does not matter if you are scalping, swing trading, long-term trading… You can make money in so many ways.</p>
<p>So what can you expect from scalping? You can expect that you can make good money if you have trading capital and working strategy which you can execute.</p>
<p>You can’t expect to make money fast with scalping if you have little trading capital and you are new to trading.</p>
<p><strong>Psychology</strong></p>
<p>Trading can destroy you and I am 100% serious about that. For many people, it is much better to trade on higher time frames. The less time you spend in front of the chart the better chances are that you won’t take decisions based on emotions.</p>
<p>When you are day trading or scalping you must follow the charts and price actions for most of the time. Hence the risk of the bad trade is bigger. It can be a reaction to some news or move you see. Remember, we are talking here about trading with leverage. It is easy to open a really big trade. Yes, if all goes well you can make like 2000$, if not you will lose half of your trading account. <strong>That is not trading – it is betting</strong>. That is why scalping is so dangerous for new trades who sometimes even don’t understand how leverage works.</p>
<p><strong>So is day trading and scalping so bad?</strong></p>
<p>No, actually I prefer day trading to longer term trading. I like to finish the day with no positions open, to know how I did today. For me, it was a process. For a while, I tried day trading and failed because of many reasons. The main one was lack of trading capital. I was trying to get rich fast. Then I moved to higher time frames, started to save money for my trading account, to learn how markets work.</p>
<p>Step by step.</p>
<p>Now, after many years of getting trading experience, I get back to day trading.</p>
<p>The great thing is that you can change your trading. There are times when I simply do not have time to day trade. I switch to swing trading on higher time frames. It is a good thing to remember.</p>
<h2>Forex broker & pairs, trading hours for scalping and day trading</h2>
<p>Selection of a broker and currency pair is very important.</p>
<p>There are many dishonest brokers, there can be problems with money withdrawing, trade execution, slippage and many others. If you read few topics from <a href="http://www.forexpeacearmy.com/">Forex Peace Army</a> you will know what I’m talking about.</p>
<p>It is also important what you trade, on which time frame. Trading EUR/USD and USD/CAD is very different, each currency pair is unique.</p>
<h2>Selecting a broker</h2>
<p>First, we need to start from most important thing when we talk about scalping – selecting a broker. There are many brokers out there, but only small part of them allow scalping. You can look for all alternatives you have. I can recommend brokers that I use with my daily trading – Yadix and TickMill. They are scalping friendly, they also have an account for scalpers – <a href="http://www.yadix.com/trading-conditions/scalper-account/">Check it here</a> and <a href="https://tickmill.com/accounts/types/pro/">here</a>.</p>
<p><img src="http://www.marketsurvival.net/wp-content/uploads/2017/12/tickmill-broker-forex.jpg" alt="tickmill-broker-forex" width="946" height="856" class="aligncenter size-full wp-image-2937" srcset="http://marketsurvival.net/wp-content/uploads/2017/12/tickmill-broker-forex.jpg 946w, http://marketsurvival.net/wp-content/uploads/2017/12/tickmill-broker-forex-300×271.jpg 300w, http://marketsurvival.net/wp-content/uploads/2017/12/tickmill-broker-forex-768×695.jpg 768w, http://marketsurvival.net/wp-content/uploads/2017/12/tickmill-broker-forex-473×428.jpg 473w" sizes="(max-width: 946px) 100vw, 946px" /></p>
<p><strong>It is not only about spread</strong></p>
<p>What is the difference? It is not only about the low spread. It is about setting stop loss and take-profit orders. With a standard broker you are not allowed to set them nearer than few pips (usually 3-5 pips are minimum). And that is a big problem. Because of that limitation, you can’t scalp.</p>
<p>When you are scalping, you plan to take more trades during a day. If something goes wrong, you close your trade. If you are profitable, you are not holding a position for long period of time. You take small profits. To be able to do that you have to place your stop loss and take profit near to the entry points. For some reason, this is a problem for most brokers and they do not allow that. That is why you want a broker which allows you to scalp.</p>
<p>It is not only a problem for scalping. In normal day trading or trading on lower time frames like 5m, 10m, 15m sometimes you want to move your stop loss near to the entry point or to break even. If the price is near to that level, with most brokers you won’t be able to do that. That is why you want a broker with no limits for stop loss and take profit orders.</p>
<p>Others broker you can check for scalping account:</p>
<ul>
<li>Markets.com</li>
<li>AvaTrade</li>
<li>AvaTrade</li>
<li>FOREX.com</li>
<li>FXCM</li>
<li>FxPro</li>
</ul>
<h2>Selecting currency pair(s)</h2>
<p>You want to scalp on Forex pairs where you have low spreads and good volatility. So it is a good idea to stick to major pairs like EUR/USD, GBP/USD, USD/JPY, USD/CHF and few others. If you have a spread around 1 pip or lower than you are good to go.</p>
<p><img src="http://www.marketsurvival.net/wp-content/uploads/2017/12/wykres-wzrost-300×212.jpg" alt="chart-gains" width="300" height="212" class="alignright wp-image-2938 size-medium" srcset="http://marketsurvival.net/wp-content/uploads/2017/12/wykres-wzrost-300×212.jpg 300w, http://marketsurvival.net/wp-content/uploads/2017/12/wykres-wzrost-768×542.jpg 768w, http://marketsurvival.net/wp-content/uploads/2017/12/wykres-wzrost-480×339.jpg 480w, http://marketsurvival.net/wp-content/uploads/2017/12/wykres-wzrost.jpg 960w" sizes="(max-width: 300px) 100vw, 300px" /></p>
<p>Another important thing – spread can be higher during news or economic data publications. In some cases, this difference can be huge so make sure that your broker offers decent trading conditions when the market is more volatile because of news.</p>
<p>The last thing – one pair at a time. If there is some strong move on EUR/USD then probably there is a similar strong on other dollar or euro pairs. Do not try to trade few pairs at the same time because in scalping it is not a good thing. Focus on one Forex pair. I recommend starting with EUR/USD or USD/JPY. If you look for more swings and you have good spreads then GBP/JPY can be a good alternative.</p>
<p>But probably you will start from EUR/USD – this is the most popular pair and you should have here the lowest costs of trading.</p>
<h2>Trading hours</h2>
<p>Most people trade during London and New York sessions. There are few reasons for that:</p>
<ul>
<li>better volatility</li>
<li>market are trending more often</li>
<li>we have news and economic data release during a day</li>
</ul>
<p><strong>Asian sessions and scalping</strong></p>
<p>Of course, it does not mean that you can’t scalp during the Asian session. You can, but you should use a trading strategy which works better in conditions like:</p>
<ul>
<li>lower volatility</li>
<li>range moves</li>
</ul>
<p>If there is no important news during Asian session then very often markets can be quiet. There are times that week is packed with news and important changes and you can see nice trends.</p>
<p>Still, Asian sessions are harder to scalp but you still can find good opportunities. Just check Yen, Aussie and Kiwi pairs. There should be more movement on them during Asian sessions.</p>
<h2>How many pips, how many pairs</h2>
<p>It depends on trader and strategy. Some scalpers prefer to take just small profit of few pips. The common range is somewhere between 10-30 pips, but some traders prefer to scalp 2-5 pips. I personally do not have a problem to hold trade little bit longer if I see a strong trend.</p>
<p><strong>How may pairs at once</strong></p>
<p>If you are new to scalping then most definitely only one. You have to react fast, follow the price action. It is hard to do that, even with few monitors on board. The other reason is education. Every pair can act a little bit different, trading can be different. It is hard to create and improve your trading strategy when you trade few pairs at the same time.</p>
<p>Of course, you can trade few pairs, but first, you should be profitable when you trade only one. Them, if you feel confident to trade more then go and try it.</p>
<p>Anyway, your choice will be narrowed down to few pairs with best trading conditions (spread, volatility). Remember that these pairs are connected with each other. In the example, when there is some big news about dollar then it can affect both EUR/USD and USD/JPY at the same time. So in many cases, it does not help if you trade similar pairs.</p>
<p>The higher time frame is also important to remember. You should know what is going on on highest TFs. If you want to trade few pairs, you have to follow few higher time frames. For new traders that might be confusing.</p>
<p><strong>How many pips</strong></p>
<p>Think about profit and not about a number of pips. In some situations, you trade with bigger leverage and it is ok to take a quick profit. Sometimes trend will be stronger, important support and resistance lines far away and it will be wise to hold on to trade a little bit longer. So no one magic value here.</p>
<h2>Forex scalping and day trading without indicators</h2>
<p>You can scalp Forex with no indicators. There are traders who are profitable with trading based purely on price. If you are interested in this kind of trading then you should learn more about:</p>
<ul>
<li>patterns</li>
<li>price action</li>
<li>candlesticks and candle wicks</li>
</ul>
<p>These topics are too wide to describe them in depth here. There are some good sources about them which I share with you below:</p>
<p><strong>Patterns in forex scalping</strong></p>
<p>Patterns work great in every market. If you are new to the topic, I always recommend Bulkowski’s books:</p>
<p><a href="https://www.amazon.com/Encyclopedia-Chart-Patterns-Wiley-Trading-ebook/dp/B0086KPSQC/">https://www.amazon.com/Encyclopedia-Chart-Patterns-Wiley-Trading-ebook/dp/B0086KPSQC/</a></p>
<p>Check also his blog here: <a href="http://thepatternsite.com/Blog.html">http://thepatternsite.com/Blog.html</a></p>
<p>yeah, it looks like site from 90s (probably is), but it is still updated. He writes mostly about stock, but you can</p>
<p>Another good blog: <a href="https://thepatterntrader.com/blog/">https://thepatterntrader.com/blog/</a>.</p>
<p><strong>Price action in Forex scalping</strong></p>
<p>It is good to know even basics of price action. You can use it together with other inidcators. There are many traders who trade mostly only with price action. I highly recommend:</p>
<ul>
<li>https://www.theforexguy.com/</li>
<li>http://www.learntotradethemarket.com/</li>
</ul>
<p>OK, maybe they trade on higher time frames, but you will learn alot about price action. You can find free articles on their sites, they also have premium courses.<br />
With that knowledge, you can put it into scalping practice.</p>
<p><strong>Candlesticks in Forex scalping</strong></p>
<p>You need to know candles even if you want to trade with indicators. You use candlesticks in price action or pattern trading. Still, it is good to read first about candles itself. </p>
<h2>Time frame in Forex scalping and day trading</h2>
<p>In scalping traders usually trade on lowest time frames. Most often it will be 1m TF. Of course, you can find systems which are created for other time frames like 5m or 15m. What is best time frame? </p>
<p>If you trade on timeframes like 15m or higher then it is hard to be all the time in front of a screen.</p>
<h3>Time frames for scalping</h3>
<p>The most popular is forex scalping on the 1-minute chart during London and NY sessions. On 1m TF you can scalp for few hours and finish your trading. It is hard to do the same on higher TFs.</p>
<h3>Time frames for day trading</h3>
<p>You do not have to trade on 1m. Many day traders use 5m or other time frames larger than 1m. It depends on strategy, but in many cases, you will get a much clearer picture and better signals.</p>
<h3>Time frames in Metatrader 5</h3>
<p>If you want to trade on less typical time frame like 2m, 3m or other then you should check Metatrader 5. For example, XM broker gives you a possibility to open an account for Metatrader 4 or Metatrader 5. If you choose MT5 then you will have a wide selection of time frames. To be precise, you can choose from time frames like:</p>
<ul>
<li>1 min.</li>
<li>2 min.</li>
<li>3 min.</li>
<li>4 min.</li>
<li>5 min.</li>
<li>6 min.</li>
<li>10 min.</li>
<li>12 min.</li>
<li>15 min.</li>
<li>20 min.</li>
<li>30 min.</li>
<li>1 hour</li>
<li>2 hours</li>
<li>4 hours</li>
<li>Daily</li>
<li>Weekly</li>
<li>Monthly</li>
</ul>
<p><a href="http://www.marketsurvival.net/wp-content/uploads/2017/11/timeframes.jpg"><img src="http://www.marketsurvival.net/wp-content/uploads/2017/11/timeframes.jpg" alt="timeframes" class="aligncenter size-full wp-image-2593" width="1294" height="219" srcset="http://marketsurvival.net/wp-content/uploads/2017/11/timeframes.jpg 1294w, http://marketsurvival.net/wp-content/uploads/2017/11/timeframes-300×51.jpg 300w, http://marketsurvival.net/wp-content/uploads/2017/11/timeframes-768×130.jpg 768w, http://marketsurvival.net/wp-content/uploads/2017/11/timeframes-1024×173.jpg 1024w" sizes="(max-width: 1294px) 100vw, 1294px" /></a></p>
<h3>Time frames lower than 1m</h3>
<p>If you want to scalp on time frames less than a minute than you can check Oanda – they have TFs like 5s, 15s or 30s. These TFs are available in their custom software, they are not available in MT4.</p>
<p>Remember that on such a low periods you will see mostly noise. They are very hard to trade, even with help of EA.</p>
<p>If you still want to trade on charts lower than 1m then you can also look for a broker with tick chart.</p>
<p>Still, in most cases, you will be good to go with 1m, 5m, and other standard time frames. I do not think that exotic time frames like 2m or 15s will give you a big advantage over the rest.</p>
<h2>Trading desk for scalping and day trading</h2>
<p>You do not need any fancy trading desk. Still, there are some things you can get to trade more comfortable.</p>
<p>First, you have to decide where is your trading place? Is it specfic room in your house or maybe you are more mobile and travel a lot?</p>
<p>If you trade from one place you can set up trading desk with desktop and LCDs.</p>
<p>If you travel a lot, you can go with set up like Cameron did:</p>
<p><iframe width="560" height="315" src="https://www.youtube.com/embed/lsAUcDvia14" frameborder="0" allowfullscreen></iframe></p>
<p>Obviously, in mobile scenario, you will go with a laptop and some smaller extra monitor.</p>
<p>As a minimum, you need one extra monitor. It does not have to be 40′ wide. You simply need that monitor so you can have a chart open all the time.</p>
<p><strong>My setup</strong></p>
<p>My current setup is temporary. It is Thinkpad 15′ laptop (T560) and 32′ LG display connected through HDMI. Nothing fancy here. I work on my laptop and I have charts open on LG display. In the past, I had two extra displays. I switched to LG because it is 32′ wide so I can follow easily more charts at once.</p>
<p>In future, I plan to travel more. I plan to switch to 15′ MacBook Pro and one additional display. Similar setup to the one showed by Cameron in a video before.</p>
<p><strong>Do you need 5 monitors?</strong></p>
<p>No, Jesus…</p>
<p>I know. You saw pro traders with professional desktop stations. They had probably like 6 or 8 displays. You don’t need that. One additional display is enough for a start. Truth is that you probably will be scalping only a few FX pairs or only EUR/USD. Another thing is that is really hard to scalp on more than one pair. It is better to focus on one pair, master your strategy.</p>
<p>Of course, if you feel that you need 2 or more additional screens then get them. Hardware is so cheap that it is not a problem. Just remember that more displays won’t make you a better trader- it doesn’t work like that.</p>
<h1>Money and Risk Management in day trading</h1>
<h2>Money management and trading capital in Forex scalping and day trading</h2>
<p>In this part, we will talk about money management and trading capital.</p>
<h3>The minimum trading capital for day trading</h3>
<p>In my opinion, a decent minimum is around 5,000$. Why 5000? There is a math behind it.</p>
<p><img src="http://www.marketsurvival.net/wp-content/uploads/2017/12/percent-150×150.jpg" alt="percent" width="150" height="150" class="alignright size-thumbnail wp-image-2914" srcset="http://marketsurvival.net/wp-content/uploads/2017/12/percent-150×150.jpg 150w, http://marketsurvival.net/wp-content/uploads/2017/12/percent-300×300.jpg 300w, http://marketsurvival.net/wp-content/uploads/2017/12/percent-768×768.jpg 768w, http://marketsurvival.net/wp-content/uploads/2017/12/percent-1024×1024.jpg 1024w, http://marketsurvival.net/wp-content/uploads/2017/12/percent-640×640.jpg 640w, http://marketsurvival.net/wp-content/uploads/2017/12/percent.jpg 1280w" sizes="(max-width: 150px) 100vw, 150px" />Lets assume that:</p>
<ul>
<li> you risk 1% of your capital</li>
<li> you look for trade opportunities with risk / reward ratio 1 / 2</li>
</ul>
<p>That means that with trading capital of 5000$:</p>
<ul>
<li> you risk 50$ of your capital (1%) per trade</li>
<li> you look for trade opportunities which will give you 100$ of profit (risk / reward ratio 1 / 2)</li>
</ul>
<p>That way even if you are winning less than 50% of your trades, you can have nice profits.</p>
<p>It is not that great if you have less than that. Lets do the math again:</p>
<p><strong>Trading capital 2000$</strong></p>
<ul>
<li> you risk 20$ per trade</li>
<li> you look for trade opportunities which will give you 40$ of profit</li>
</ul>
<p><strong>Trading capital 1000$</strong></p>
<ul>
<li> you risk 10$ per trade</li>
<li> you look for trade opportunities which will give you 20$ of profit</li>
</ul>
<p><strong>Trading capital 500$</strong></p>
<ul>
<li> you risk 5$ per trade</li>
<li> you look for trade opportunities which will give you 10$ of profit</li>
</ul>
<p><strong>Trading capital 100$</strong></p>
<ul>
<li> you risk 1$ per trade</li>
<li> you look for trade opportunities which will give you 2$ of profit</li>
</ul>
<p>You can see clearly that the lower your trading capital is, the lower potential profit. </p>
<p>There is also a psychological aspect involved. It is really hard to follow your trading plan (and risk only 1%) when your potential profit is something like 2, 5 or 10$. It leads to overtrading or trading with a too big position. So you end up risking much more than 1%. </p>
<p>It is really hard to stay motivated with small capital. Trading is hard, you work hard for your profits and as a result, you get few dollars of gains. That’s why you need big enough capital. My recommendation is 5000$ as a minimum.</p>
<h3>Read, test…</h3>
<p>Money management is the fundament of your success. When you grow account, it will get even more important. I would recommend two things which may help:</p>
<ul>
<li> keep a track of your results</li>
<li> learn from others</li>
</ul>
<p>There are great tools like <a href="https://www.myfxbook.com">MyFXBook</a>, which help you to analyze your results. You have great statistics about drawdown, gains and many more. You can see right away if you are following your trading plan or not. It looks lke this:</p>
<p><img src="http://www.marketsurvival.net/wp-content/uploads/2017/12/myfxbook-panel.jpeg" alt="myfxbook-panel" width="752" height="705" class="aligncenter size-full wp-image-2916" srcset="http://marketsurvival.net/wp-content/uploads/2017/12/myfxbook-panel.jpeg 752w, http://marketsurvival.net/wp-content/uploads/2017/12/myfxbook-panel-300×281.jpeg 300w, http://marketsurvival.net/wp-content/uploads/2017/12/myfxbook-panel-376×352.jpeg 376w" sizes="(max-width: 752px) 100vw, 752px" /></p>
<p>You should see what other people are doing. How they manage their money? There are books about money management in trading. You can also follow traders on social media, read their blogs. Maybe you will see something interesting which you can use in your trading.</p>
<h3>What if you have only a few hundreds?</h3>
<p>Well, that’s not the end of the world. </p>
<p>If you have only something like 100-200$ then, of course, you can scalp on a smaller position <strong>as a training</strong>. Do not expect to make fortune with scalping when you start with 100$. You still should follow 1% risk rule. Master your trading plan. At the same time, work a way to get trading capital.</p>
<p>You need that capital. Do not expect that you go from zero to hero in few months with 100$. </p>
<h3>How to get trading capital</h3>
<p><img src="http://www.marketsurvival.net/wp-content/uploads/2017/12/dollar-bill-150×150.jpg" alt="" width="150" height="150" class="alignright size-thumbnail wp-image-2915" />There are many ways to do that. You know, classic things like saving or getting a job. There are so many ways to earn money. It doesn’t have to be online. You can go and work on the weekends. There are many different approaches. Just figure it out.</p>
<p><strong>Don’t borrow money for trading</strong></p>
<p>This is super important. Just don’t, even if you have a big plan to earn huge money and payback from the earnings. It is so easy to lose money in trading that you do not want more psychological pressure from trading money you do not own. Trust me on that.</p>
<p>It is enough that you invest with a leverage.</p>
<p><strong>Do not dream about going pro with 100$</strong></p>
<p>It may be possible, but that is a risky road to chose. Some people believe that they are super traders and can go from 100$ to 1000$ or 5000$ in a short time. That is a dangerous thinking. Because of that approach, you will most probably trade very risky, not follow a trading plan and you will lose that money very fast. Remember, if you have 100$ then use it to practice with small positions. In the meantime, try to find some extra source of income.</p>
<p><strong>Protect your capital</strong></p>
<p>You worked hard to save money for your trading capital, don’t waste it in a stupid way. Chances are that you are not a trading star, so you have to fight with the market like everyone else. Stick to your trading plan, cut losses, manage your positions wisely, don’t be too greedy. The common mistake risking too much. Just trade with positions which are adequate to your trading capital (so it means risk 1% and so on).</p>
<p><strong>Withdraw profits, be carefoul with forex broker</strong></p>
<p>Let’s say that you make money in trading on a regular basis. That is great. It is a good practice to withdraw some of your profits every month. The main idea here is that you risk only money from your broker account. If you put part of that money (from profit) in the saving account then you can’t lose them.</p>
<p>There is another thing – some brokers, ever big ones can’t be trusted for 100%. Everything can be fine and suddenly there will be a problem with your account, with money withdraw etc. There are many histories like that. You should be careful and always move part of the profits to the saving account.</p>
<h3>Money management</h3>
<p>This topic is very wide, below I will only scratch a surface.</p>
<p><strong>It is all about money and risk management</strong></p>
<p>First, you need to understand and accept fact that money management is fundamental to your success. This is the common mistake – new traders look for that magic strategy, for this best setting for indicators. Yes, it is important, but it is only a part of your trading success. The rest are other factors like money and risk management, psychology.</p>
<p><strong>Read about money management</strong></p>
<p>There are publications about money management in trading. Maybe not in scalping, but still it is good to read them. You can learn from them more about concepts around money management, risk management. I can recommend publications:</p>
<ul>
<li> <a href="https://www.amazon.com/Traders-Money-Management-System-Trading-ebook/dp/B003L784FC/">https://www.amazon.com/Traders-Money-Management-System-Trading-ebook/dp/B003L784FC/</a></li>
<li> <a href="https://www.amazon.com/Forex-Management-Currency-Strategies-Beginners-ebook/dp/B071ZVYBSM/">https://www.amazon.com/Forex-Management-Currency-Strategies-Beginners-ebook/dp/B071ZVYBSM/</a></li>
<li> <a href="https://www.amazon.com/Traders-Money-Management-System-Trading-ebook/dp/B003L784FC/">https://www.amazon.com/Traders-Money-Management-System-Trading-ebook/dp/B003L784FC/</a></li>
</ul>
<p>But there are many others. Try to search for the best one for you.</p>
<p><strong>Cut loses</strong></p>
<p>You have to know when to close a trade with a loss. Many people struggle with it. They hope that price will reverse. Sometimes it will, sometimes it won’t. Cutting losses is part of every strategy. It is like in football (soccer) – you have to score but you also have to know how to defend your own goal. Without that you will never be profitable in trading, especially in scalping where discipline about cutting loses is so important.</p>
<p><strong>Use leverage wisely</strong></p>
<p>Leverage can be your best friend or worst enemy. </p>
<p><strong>Monitor your progress</strong></p>
<p>You can start your own diary or use online tools like MyFX BOOK. It is important to know more about your decision making. </p>
<p>This is important. In scalping and day trading, you trade with higher leverage so you need trading capital. </p>
<h2>Forex scalping, day trading – news and economic data</h2>
<p>There are two types of traders:</p>
<ul>
<li>traders who trade during news release</li>
<li>traders who avoid this periods</li>
</ul>
<p>I am personally somewhere in the middle ;). If there is some very important news publication I rather stay away from trading. Sometimes I trade but with much lower leverage. You have to watch for NFP (once a month). Also, every news from the central bank can be important.</p>
<p>Which news is important and which is not? You have all information in online scheudles like:</p>
<ul>
<li> <a href="https://www.dailyfx.com/calendar">https://www.dailyfx.com/calendar</a></li>
<li> <a href="https://www.forexfactory.com">https://www.forexfactory.com</a>/</li>
</ul>
<p>Of course, it is recommended to learn more about each economic data factor.</p>
<p>Anyway, during a day we have many data publications. I normally trade during that time. I simply have calendar opened from <a href="https://www.dailyfx.com/calendar">DailyFX</a>. Thanks to that I know when volatility can be higher.</p>
<p>How to trade during a news</p>
<p>If you want to learn how to trade during a news release, I recommend monthly webinar with Wayne McDonell on fxstreet. The first webinar took place ten years ago. I highly recommend it, you can learn here a lot. Read more <a href="http://about.fxstreet.com/fxstreet-celebrates-10-years-non-farm-payrolls-live-coverage-webinar-wayne-mcdonell/">here</a>.</p>
<h2>Position management in Forex scalping and day trading</h2>
<p>It is important to learn how to manage position when you are scalping. There are few important aspects:</p>
<h2>Stop loss in Forex scalping</h2>
<p>Cut yours loses quick. You will trade with bigger leverage so you can’t afford to have big loses. Hope is a false advisor. There is always the next trade.there is no 100% winning system and you have to accept that there will be losing trades. You have to learn when to close a trade so you can survive and stay in the game.</p>
<h3>Moving stop loss higher (when in profit) – manually, trailing stop loss</h3>
<p>Simple and effective. With stop loss, you want to protect your money and do not lose too much. With Moving stop loss you want to protect your profit. You can keep it at a distance from the current price. The main idea is that when a price is moving in the direction you want and you are profitable then you move your stop loss.</p>
<p>You can do it manually or use a trailing stop loss.</p>
<p>In Metatrader you simply select value from trailing stop loss menu:</p>
<p><img src="http://www.marketsurvival.net/wp-content/uploads/2017/12/trailing_stop_loss.png" alt="trailing_stop_loss" class="aligncenter size-full wp-image-2923" width="338" height="328" srcset="http://marketsurvival.net/wp-content/uploads/2017/12/trailing_stop_loss.png 338w, http://marketsurvival.net/wp-content/uploads/2017/12/trailing_stop_loss-300×291.png 300w, http://marketsurvival.net/wp-content/uploads/2017/12/trailing_stop_loss-169×164.png 169w" sizes="(max-width: 338px) 100vw, 338px" /></p>
<p>When the price moves in the right direction, it will first move stop loss to break even position. Later it will raise the stop with a value you selected.</p>
<p>It is important that trailing stop loss works only when Metatrader terminal is open. Read more about trailing stop loss in Metatrader <a href="https://www.metatrader4.com/en/trading-platform/help/positions/trailing">here</a>.</p>
<h3>Break even</h3>
<p>Another very important concept. It takes time to master it, but I believe that it is worth a try. The idea is rather simple. We can divide it into steps:</p>
<ol>
<li>you open a trade and set stop loss</li>
<li>when price moves in the direction you want and is some distance from the entry point then you move stop loss to the entry point</li>
<li>if price moves more in the direction you want, you move stop loss even higher</li>
</ol>
<p>&nbsp;</p>
<p>That is very important. Thanks to that you are sure that in the worst case scenario you won’t lose any money. That is important for both your trading capital and psychic. It is never a good feeling to lose money. You can’t avoid it, but with avoiding loses with break-even you start to think more about money and position management.</p>
<p>That is opposite to situation when you are losing money and you hope that things will change. With break-even approach, you start to realize that you are in control of your trading money and results.</p>
<p>If you have a problem with it, you can use simple expert advisor like Breakeven Expert. Below is an example for Metatrader, but you should find similar solutions for other platforms.</p>
<p>It is a custom indicator, first you have to install it. When you are done, simply add it from Navigator to the chart:</p>
<p><img src="http://www.marketsurvival.net/wp-content/uploads/2017/12/expert-adisors.jpg" alt="expert-advisors" class="aligncenter size-full wp-image-2920" width="554" height="573" srcset="http://marketsurvival.net/wp-content/uploads/2017/12/expert-adisors.jpg 554w, http://marketsurvival.net/wp-content/uploads/2017/12/expert-adisors-290×300.jpg 290w, http://marketsurvival.net/wp-content/uploads/2017/12/expert-adisors-277×286.jpg 277w" sizes="(max-width: 554px) 100vw, 554px" /></p>
<p>Next, you have to define pips value, when indicator will move stop loss. Value may be different for different brokers (depends if you have format x.xxxxx or x.xxxx). In this case we have 30 value which represents 3 pips for pairs in format x.xxxxx:</p>
<p><img src="http://www.marketsurvival.net/wp-content/uploads/2017/12/break-even-expert1.jpg" alt="break-even-expert1" class="aligncenter size-full wp-image-2922" width="796" height="364" srcset="http://marketsurvival.net/wp-content/uploads/2017/12/break-even-expert1.jpg 796w, http://marketsurvival.net/wp-content/uploads/2017/12/break-even-expert1-300×137.jpg 300w, http://marketsurvival.net/wp-content/uploads/2017/12/break-even-expert1-768×351.jpg 768w, http://marketsurvival.net/wp-content/uploads/2017/12/break-even-expert1-398×182.jpg 398w" sizes="(max-width: 796px) 100vw, 796px" /></p>
<p>We should make sure that autotrading is on:</p>
<p><img src="http://www.marketsurvival.net/wp-content/uploads/2017/12/auto-trading.jpg" alt="auto-trading" class="aligncenter size-full wp-image-2921" width="232" height="130" srcset="http://marketsurvival.net/wp-content/uploads/2017/12/auto-trading.jpg 232w, http://marketsurvival.net/wp-content/uploads/2017/12/auto-trading-116×65.jpg 116w" sizes="(max-width: 232px) 100vw, 232px" /></p>
<p>And three should be a confirmation that everything is ok in form on smiley face in a corner:</p>
<p><img src="http://www.marketsurvival.net/wp-content/uploads/2017/12/break-even-working.jpg" alt="break-even-working" class="aligncenter size-full wp-image-2919" width="249" height="175" srcset="http://marketsurvival.net/wp-content/uploads/2017/12/break-even-working.jpg 249w, http://marketsurvival.net/wp-content/uploads/2017/12/break-even-working-124×87.jpg 124w" sizes="(max-width: 249px) 100vw, 249px" /></p>
<p>When you open a trade, you can set an initial stop loss. Then, after a move of the value entered by you, EA will move stop loss to the entry point.</p>
<p>Download Breakeven Expert for Metatrader <a href="http://www.marketsurvival.net/wp-content/uploads/2017/12/Experts.zip">here</a>.</p>
<h2>Taking profits</h2>
<h3>Set take profit target</h3>
<p>It is important to know where are possible support and resistance lines. This can help you to decide where is a good take profit target. You should remember that markets move very fast when they are close to these levels. That is why in so many cases it is better to close at specific take profit area than to wait for a signal which will lag.</p>
<h3>Partial close</h3>
<p>Another great technique to protect your profits. Let’s say that you have a profitable long trade. It is still open and you are a good few pips in profit. You want to close it but there is an important resistance 15 pips ahead. Should you close all or move stop loss higher?</p>
<p>Another solution is a partial close. There is an option to do that in Metatrader (other platforms too). It is simple. You just go to the options menu and close part of a trade. It doesn’t have to be equal – so you don’t have to close half or something. You can specify how much you want to close.</p>
<p>In Metatrader, simply select Modify option:</p>
<p><img src="http://www.marketsurvival.net/wp-content/uploads/2017/12/metatrader-partial-close.png" alt="metatrader-partial-close" class="aligncenter size-full wp-image-2925" width="623" height="212" srcset="http://marketsurvival.net/wp-content/uploads/2017/12/metatrader-partial-close.png 623w, http://marketsurvival.net/wp-content/uploads/2017/12/metatrader-partial-close-300×102.png 300w, http://marketsurvival.net/wp-content/uploads/2017/12/metatrader-partial-close-311×106.png 311w" sizes="(max-width: 623px) 100vw, 623px" /></p>
<p>And select the size of position you want to close:</p>
<p><img src="http://www.marketsurvival.net/wp-content/uploads/2017/12/mt4-trade-partial-close.png" alt="mt4-trade-partial-close" class="aligncenter size-full wp-image-2924" width="735" height="360" srcset="http://marketsurvival.net/wp-content/uploads/2017/12/mt4-trade-partial-close.png 735w, http://marketsurvival.net/wp-content/uploads/2017/12/mt4-trade-partial-close-300×147.png 300w, http://marketsurvival.net/wp-content/uploads/2017/12/mt4-trade-partial-close-367×180.png 367w" sizes="(max-width: 735px) 100vw, 735px" /></p>
<p>It is very helpful expecially for longer time frames trade. You want to take some profit, rise the stop loss and let the rest go with the flow. Like in the example below:</p>
<p><img src="http://www.marketsurvival.net/wp-content/uploads/2017/12/partial-close-example.jpg" alt="partial-close-example" class="aligncenter size-full wp-image-2926" width="1527" height="857" srcset="http://marketsurvival.net/wp-content/uploads/2017/12/partial-close-example.jpg 1527w, http://marketsurvival.net/wp-content/uploads/2017/12/partial-close-example-300×168.jpg 300w, http://marketsurvival.net/wp-content/uploads/2017/12/partial-close-example-768×431.jpg 768w, http://marketsurvival.net/wp-content/uploads/2017/12/partial-close-example-1024×575.jpg 1024w, http://marketsurvival.net/wp-content/uploads/2017/12/partial-close-example-763×428.jpg 763w" sizes="(max-width: 1527px) 100vw, 1527px" /></p>
<p>It is a great option.</p>
<h3>Use data from Pivot points and Fibonacci</h3>
<p>When you select potential places to close a trade, many traders look at resistance and support levels from a higher time frame. That is a correct approach, still you can get more information like:</p>
<ul>
<li> Pivot Points levels</li>
<li> Fibonacci levels</li>
</ul>
<p>Price really respect them and you can partial close your trade to book some part of your profit. The good example is this chart of USD/JPY. Here we can see that we have 1h time frame with weekly Pivot Points. Price stopped (from the left) at weekly S1, weekly R1, weekly S1. If you were in a trade, this was good places to at least close part of your position or take whole profit and exit.</p>
<p><img src="http://www.marketsurvival.net/wp-content/uploads/2017/12/pivot-lines.jpg" alt="pivot-lines" width="1393" height="457" class="aligncenter size-full wp-image-2927" srcset="http://marketsurvival.net/wp-content/uploads/2017/12/pivot-lines.jpg 1393w, http://marketsurvival.net/wp-content/uploads/2017/12/pivot-lines-300×98.jpg 300w, http://marketsurvival.net/wp-content/uploads/2017/12/pivot-lines-768×252.jpg 768w, http://marketsurvival.net/wp-content/uploads/2017/12/pivot-lines-1024×336.jpg 1024w, http://marketsurvival.net/wp-content/uploads/2017/12/pivot-lines-696×228.jpg 696w" sizes="(max-width: 1393px) 100vw, 1393px" /></p>
<p>That is an example of higher TF, but it works the same if you are using daily Pivot Points and you are scalping on the lower time frame.</p>
<p>It depends on your trading strategy. Still, it is good to know in advance where important levels where you can take profit and exit.</p>
<h1>Indicators in daytrading</h1>
<h2>Forex ATR – trailing stop loss in scalping and day trading</h2>
<p>Trailing stop loss is one of my favorite tools. It gives you clear signals, helps you to catch bigger moves. There are many popular variations of this tool. If you use Metatrader4 then I recommend Chandelier Exit – it is a custom indicator so you have to download it and install in MT4.</p>
<p>When you add it to the chart, you should specify Inputs. I recommend a little bit longer range and period, so you can catch easier bigger moves. ATR Multiplier is very important – standard one is around 3.0 value. Remember that you can change it every decimal value so it can be 3.7, 4.0, 4.4 etc. This small decimal changes can be clearly seen on chart and thanks to them you may have many signals and short-term trades or fewer signals but with the possibility to catch more trend moves.</p>
<p>I usually go with settings like this below:<a href="http://www.marketsurvival.net/wp-content/uploads/2017/11/trailing-stop-parameters.jpg"><img src="http://www.marketsurvival.net/wp-content/uploads/2017/11/trailing-stop-parameters.jpg" alt="trailing-stop-parameters" class="aligncenter size-full wp-image-2575" width="438" height="201" srcset="http://marketsurvival.net/wp-content/uploads/2017/11/trailing-stop-parameters.jpg 438w, http://marketsurvival.net/wp-content/uploads/2017/11/trailing-stop-parameters-300×138.jpg 300w" sizes="(max-width: 438px) 100vw, 438px" /></a>Still, when I am on hiher time frame or more trending pairs (yen pairs) then I will go with higher multiplier (&gt; 4.0).</p>
<p>There is no single correct set of settings for trailing stop. You have to set the best parameters based on price history. For every time frame and pair, it can be different.</p>
<p>About time frames. Trailing stop loss works on every time frame, but if your goal is to scalp on trends then I suggest to try it on 5m or 15m. You can catch really big moves. Still, if you want to scalp on 1m TF then you should be fine.</p>
<p>To the charts!</p>
<p>Trailing stop loss is a simple line for long and short positions:</p>
<p>&nbsp;</p>
<p><a href="http://www.marketsurvival.net/wp-content/uploads/2017/11/trailing-stop-loss-1.jpg"><img src="http://www.marketsurvival.net/wp-content/uploads/2017/11/trailing-stop-loss-1.jpg" alt="trailing-stop-loss-1" class="aligncenter size-full wp-image-2576" width="1501" height="878" srcset="http://marketsurvival.net/wp-content/uploads/2017/11/trailing-stop-loss-1.jpg 1501w, http://marketsurvival.net/wp-content/uploads/2017/11/trailing-stop-loss-1-300×175.jpg 300w, http://marketsurvival.net/wp-content/uploads/2017/11/trailing-stop-loss-1-768×449.jpg 768w, http://marketsurvival.net/wp-content/uploads/2017/11/trailing-stop-loss-1-1024×599.jpg 1024w" sizes="(max-width: 1501px) 100vw, 1501px" /></a> It is best to join trailing stop loss with other tools. The main reason for that is that you want to trade in a trend direction (unless you are a counter-trend trader). There are many combinations here. Below you can see trailing stop loss joined with averages and MACD with longer parameters.</p>
<p>The main idea here is to go with the main trend because the chances for success are best. In the example below we can see from averages and MACD that trend is up so we look only for long opportunities. We close trade when there is a close below trailing line:</p>
<p><a href="http://www.marketsurvival.net/wp-content/uploads/2017/11/trailing-stop-range-move.jpg"></a><a href="http://www.marketsurvival.net/wp-content/uploads/2017/11/trailing-stop-full-chart.jpg"><img src="http://www.marketsurvival.net/wp-content/uploads/2017/11/trailing-stop-full-chart.jpg" alt="trailing-stop-full-chart" class="aligncenter size-full wp-image-2574" width="1498" height="873" srcset="http://marketsurvival.net/wp-content/uploads/2017/11/trailing-stop-full-chart.jpg 1498w, http://marketsurvival.net/wp-content/uploads/2017/11/trailing-stop-full-chart-300×175.jpg 300w, http://marketsurvival.net/wp-content/uploads/2017/11/trailing-stop-full-chart-768×448.jpg 768w, http://marketsurvival.net/wp-content/uploads/2017/11/trailing-stop-full-chart-1024×597.jpg 1024w" sizes="(max-width: 1498px) 100vw, 1498px" /></a><a href="http://www.marketsurvival.net/wp-content/uploads/2017/11/trailing-stop-range-move.jpg"></a></p>
<p>I don’t want to make false statement that trailing stop loss is so ideal. As every technical tool, it can be hard to trade during a range move:</p>
<p><a href="http://www.marketsurvival.net/wp-content/uploads/2017/11/trailing-stop-range-move.jpg"><img src="http://www.marketsurvival.net/wp-content/uploads/2017/11/trailing-stop-range-move.jpg" alt="trailing-stop-range-move" class="aligncenter size-full wp-image-2573" width="1003" height="531" srcset="http://marketsurvival.net/wp-content/uploads/2017/11/trailing-stop-range-move.jpg 1003w, http://marketsurvival.net/wp-content/uploads/2017/11/trailing-stop-range-move-300×159.jpg 300w, http://marketsurvival.net/wp-content/uploads/2017/11/trailing-stop-range-move-768×407.jpg 768w" sizes="(max-width: 1003px) 100vw, 1003px" /></a>So yeah, it is still important to draw support and resistance lines so you can have better picture of situation in the markets.</p>
<p>Trailing stop loss can be joined with Pivot lines. If you follow me long enough, you know that I can join almost everything with pivots :). There is a reason for that. They give you very valuable information about potential entry and exit points. Just like in the example below. We could see that trend is up so we were looking for long trades. After entry, there was a strong move up. If we would follow only signals from trailing stop loss then the close should be around 1.1635 level. Thanks to the pivot lines we could see the price approaching R3 line – that is always a great place to exit and take profit. It was also in that case – if you close at R3 line that was around 1.1643. 8 pips higher, but remember that we are talking about 1-minute chart!</p>
<p>&nbsp;</p>
<p><a href="http://www.marketsurvival.net/wp-content/uploads/2017/11/trailing-stop-pivot-scalping.jpg"><img src="http://www.marketsurvival.net/wp-content/uploads/2017/11/trailing-stop-pivot-scalping.jpg" alt="trailing-stop-pivot-scalping" class="aligncenter size-full wp-image-2572" width="1501" height="876" srcset="http://marketsurvival.net/wp-content/uploads/2017/11/trailing-stop-pivot-scalping.jpg 1501w, http://marketsurvival.net/wp-content/uploads/2017/11/trailing-stop-pivot-scalping-300×175.jpg 300w, http://marketsurvival.net/wp-content/uploads/2017/11/trailing-stop-pivot-scalping-768×448.jpg 768w, http://marketsurvival.net/wp-content/uploads/2017/11/trailing-stop-pivot-scalping-1024×598.jpg 1024w" sizes="(max-width: 1501px) 100vw, 1501px" /></a></p>
<p>There are many other examples how trailing stop loss joined with Pivot lines can give you much better results. Even on a 1m time frame as you could see above.</p>
<h2>Forex Parabolic SAR in scalping and day trading</h2>
<p>Parabolic SAR is similar to trailing stop loss. The most important parameter to set is step:<a href="http://www.marketsurvival.net/wp-content/uploads/2017/11/parabolic-sar-parameters.jpg"><img src="http://www.marketsurvival.net/wp-content/uploads/2017/11/parabolic-sar-parameters.jpg" alt="parabolic-sar-parameters" class="aligncenter size-full wp-image-2570" width="435" height="234" srcset="http://marketsurvival.net/wp-content/uploads/2017/11/parabolic-sar-parameters.jpg 435w, http://marketsurvival.net/wp-content/uploads/2017/11/parabolic-sar-parameters-300×161.jpg 300w" sizes="(max-width: 435px) 100vw, 435px" /></a>Every decimal change makes a huge difference.</p>
<p>Similar to trailing stop loss, Parabolic SAR works great in trending markets:</p>
<p>&nbsp;</p>
<p><a href="http://www.marketsurvival.net/wp-content/uploads/2017/11/parabolic-sar-scalping.jpg"><img src="http://www.marketsurvival.net/wp-content/uploads/2017/11/parabolic-sar-scalping.jpg" alt="parabolic-sar-scalping" class="aligncenter size-full wp-image-2569" width="1501" height="877" srcset="http://marketsurvival.net/wp-content/uploads/2017/11/parabolic-sar-scalping.jpg 1501w, http://marketsurvival.net/wp-content/uploads/2017/11/parabolic-sar-scalping-300×175.jpg 300w, http://marketsurvival.net/wp-content/uploads/2017/11/parabolic-sar-scalping-768×449.jpg 768w, http://marketsurvival.net/wp-content/uploads/2017/11/parabolic-sar-scalping-1024×598.jpg 1024w" sizes="(max-width: 1501px) 100vw, 1501px" /></a></p>
<p>&nbsp;</p>
<p>In a range move it is not that great:<a href="http://www.marketsurvival.net/wp-content/uploads/2017/11/parabolic-range.jpg"><img src="http://www.marketsurvival.net/wp-content/uploads/2017/11/parabolic-range.jpg" alt="parabolic-range" class="aligncenter size-full wp-image-2568" width="1503" height="876" srcset="http://marketsurvival.net/wp-content/uploads/2017/11/parabolic-range.jpg 1503w, http://marketsurvival.net/wp-content/uploads/2017/11/parabolic-range-300×175.jpg 300w, http://marketsurvival.net/wp-content/uploads/2017/11/parabolic-range-768×448.jpg 768w, http://marketsurvival.net/wp-content/uploads/2017/11/parabolic-range-1024×597.jpg 1024w" sizes="(max-width: 1503px) 100vw, 1503px" /></a>But it is normall with every other tool. You should join Parabolic SAR with other tools so you can be sure to trade with the trend.</p>
<h2>Forex scalping and day trading using moving averages</h2>
<p>Ahh, averages. Almost everybody started trading adventure with them. They are not that bad if you use them for something more than signal from the cross.</p>
<p>What type of averages? Expotentiaand Linear Weighted averages should be the best choice in most cases.</p>
<p>When we talk about scalping with averages then it is most likely that we want to:</p>
<ul>
<li>have information about trend (and therefore trade) direction</li>
<li>have signals based on averages</li>
</ul>
<p>&nbsp;</p>
<p>When it comes to signals, we should remember that signals can occur:</p>
<ul>
<li>after the cross of averages</li>
<li>when price close above or below average (for example 100 or 200 or other)</li>
</ul>
<p>So we have few combinations here.</p>
<p>&nbsp;</p>
<p>When we talk about averages in scalping then we have to talk about Rainbow chart. There was a day when it was a very popular approach to trading and especially scalping Forex.</p>
<p>As you can see, Rainbow chart is simply a set of averages divided into groups. Each group has a different color. When averages are wide, we can see that trend is strong.</p>
<p>Also, in classic approach price chart is set to line. The main goal here is to make things simple. When you see that the price line is above all averages you go short. When averages are positive and price line is above them you go long:</p>
<p><img src="http://www.marketsurvival.net/wp-content/uploads/2017/11/rainbow-scalping-1.jpg" alt="rainbow-scalping-1" class="aligncenter size-fu

Leave a Comment

Leave a Reply

Your email address will not be published. Required fields are marked *