Scalping is a trading strategy that is focused on the smaller time-frames and is often popular with traders that work full-time jobs, or simply don't have the time in their day to dedicate to the art of viewing charts and performing technical analysis.
Which Forex Majors are best to start with?
The key to scalping Forex Majors and G10 pairs is to focus on the top 10 pairs that have the most volume during the three daily trading sessions. By focusing on these pairs at the start of your trading journey before moving onto minor currency pairs or what's known as the exotics, you'll be better able to fine-tune your scalping strategy.
So the question remains, just what are the best currency pairs to begin with? Most experts from the trading floor would suggest that newer traders looking to develop their scalping strategies, should focus on popular pairs such as AUDUSD, EURUSD, USDJPY, GBPUSD. Once you have trading these FX Majors a few times under your belt, you'll be able to progress to other currency crosses, such as EURGBP, EURJPY, GBPAUD, and so on.
Having a strict trading strategy and the conviction to stick with your trades, along with understanding when to exit losing trades as soon as they have been stopped out, will see you staying on the right path. While this might seem a simple concept at first, in this exclusive online streaming webinar the team at FX Evolution discuss why having a scalping system in-place is highly important.
Which timeframe is best for scalpers?
During the trading day there are three key timeframes that traders should be focusing on. These are known in order as the Asian Session, London Session, and New York Session (US). Which one is best you might be asking? Well that all depends on a few factors such as your personal trading preferences, how much time you have in your day to dedicate to trading, and if you are busy with a day-job that might be taking up the majority of your time. Either way, with three sessions and plenty of volume on the Forex Majors during them, traders should be able to find plenty of trading opportunity.
Scalping price action sequences
Price action sequences is the study of candle movement on the charts of the Forex Major that you are focusing on. In this instance, as we're talking about scalping, this would often be on the smaller timeframes such as the 5 and 15 minute charts on your trading platform, instead of the 1 hour or larger, which is commonly used by traders who follow swing or day-trading strategies.
Now all that's left to do is for you to take action and trade the possibilities with Pepperstone. With the correct risk management strategies firmly in place, utilising entry and exit positions on your trades and entering positions when the conditions match your conviction, you'll be well on your way to scalping the Forex majors just like the experts on the trading floor.