Scalping Forex Strategy

Scalping Forex strategy — is a simple trading system that relies on very close targets, extremely low stop-loss and a lot of positions opened and closed during a short period of time. Not all Forex brokers allow scalping and not all who allow are good to scalp with. Scalping may not be suitable for all traders and, personally, I do not recommend scalping to anyone. The most simple scalping Forex trading system is presented here.

Features

• Nice profits for lucky (intuitive) traders.
• No need to pay attention to technical, fundamental or any other analysis.
• Spreads eat a big part of profit.
• Reward/risk ratio is usually too low.
• Not all Forex brokers allow scalping.
• Requires a lot of time for trading and monitoring.

How to Trade?

1. Currency pairs with a lot of intraday volatility but low spreads are recommended (EUR/JPY, GBP/USD, EUR/USD and USD/JPY are good examples).
2. M1 timeframe or lower is optimal.
3. Optimal trading time is during the European/U.S. and U.S./Asian trading sessions' intersection.
4. Prepare to enter the positions by closely monitoring the market activity for 5–15 minutes.
5. When you think that you "caught" the current short-term trend, enter a position.
6. Set stop-loss to about 10 pips.
7. The general rule for target profit is one or one-and-a-half spreads. Setting take-profit to such low levels (2–5 pips) is almost impossible, so you'll need to monitor the position to see the target profit and close it manually.

Example

No example chart is present for this trading system as there is nothing important to be shown on the chart. Let's view the following examples.

1. You open Long position on EUR/USD with 10 pips stop-loss and target for 4 pips of profit. After 20 second the position reaches 4 pips of profit and you close it.
2. You open Short position on GBP/USD with 10 pips stop-loss and target for 4 pips of profit. After 3–4 minutes the trend unexpectedly reverses and the position is closed by stop-loss.
3. You open Short position on USD/JPY with 10 pips stop-loss and target for 3 pips of profit. After about 1 minute the position reaches 4 pips of profit and you close it.
4. You open Long position on EUR/JPY with 10 pips stop-loss and target for 5 pips of profit. After 5 seconds the price spikes and the position reaches 12 pips of profit and you close it.
5. That's 10 pips of profit in less than 6 minutes. Of course, it's purely hypothetical.

Warning!

Use this strategy at your own risk. EarnForex.com can't be responsible for any losses associated with using any strategy presented on the site. It's not recommended to use this strategy on the real account without testing it on demo first.

Martingale Trading System

Martingale trading system — is based on the popular betting (gambling) system of the 18th century France. The main principle of this system is to double the bet each time you lose so that if you win (considering a 100% bet win/loss each time) you recover a previous loss and will also gain the first bet amount. If one had an infinite amount of money, this strategy would be a sure-fire thing as with the infinite amount of bets the necessary result will with probability 1 eventually come. The problem is that no trader possesses an infinite wealth and thus utilizing this strategy eventually leads to a wiped account. Although it's a very popular Forex trading system and is used in many paid Forex expert advisors, I strongly don't recommend trading with it.

Features

• Theoretically bullet-proof system.
• Practically unsound.
• Reward/risk ratio can reach extremely low values.

How to Trade?

1. Any currency pair and timeframe will work.
2. Determine your basic position size.
3. Place an order in a random direction (Buy or Sell) with some fixed stop-loss and the same take-profit.
4. After the SL or TP is triggered you either win or lose.
5. If you win, set the position size to the initial and go the step 3.
6. If you lose, double the position size and go to step 3.
7. If you have infinite trading account balance, eventually you'll win a lot. If your account balance is limited you'll lose it eventually.

Example

No example chart is present for this trading system as there is nothing important to be shown on the chart. Let's view the following example.

1. You start with $10,000 account and can trade with mini Forex lots (0.1 of the standard lot) and decide to trade on EUR/USD.
2. You define your basic position size as 0.1 lots.
3. You decide to go Long setting stop-loss at 40 pips (or $4). The take-profit is set to the same value.
4. You lose the position. Now your account balance is $9,996.
5. You double your next position size to 0.2 lots, so that using the same stop-loss and take-profit levels you risk $8 and also have a chance to win $8. You decide to change the position's direction and go Short.
6. You win and now you've recovered lost $4 and also won $4. Your account balance is $10,004.
7. You return your position to initial 0.1 lots and start over.
8. With $10,000 account balance and $4 basic risk value you'll have to lose 11 positions in a row to wipe your account. You'll have to win 250 positions to double your balance.

Warning!

Use this strategy at your own risk. EarnForex.com can't be responsible for any losses associated with using any strategy presented on the site. It's not recommended to use this strategy on the real account without testing it on demo first.