30 minute Forex scalping method revealed

[Udaytrading.com]

The principles to this 30 minutes scalping strategy can be applied on almost any time frame however please make adjustments for stop loss levels and profit targets.

This trading strategy takes place approximately 3 to four times in a 24 hour period between the three major currency pairs.

I like to use this strategy on a 30 minute chart however I know that some successfully apply it on smaller time frames. When choosing to look for a different time frame you must do some testing to determine your comfort level for profit targets and stop loss. Each one of us prefers to use a different type of stop loss and it may change the outcome of this strategy but I will attempt to explain my stop loss strategies with this 30 minute technique.

How to set up your charts:
I typically use the CCI and the MACD histogram. I also apply the -DMI and the +DMI to my charts and when I am looking to scalp I often times will rely on the DMI.

In the price pain window I use a 20 day EMA. Generally I will go long when price is above the 20 day EMA and short when it is below. These are just some basic outline principles and can be adjusted according to market conditions such as consolidation.

I also use the fulcrum based on each day price activity. A general method of using the fulcrum is to go long when price is above the fulcrum and short when the low.
please remember these are just outline rules to apply some structure, don’t forget to do some testing.

The set up:
The entry occurs when I have a completed candle pattern such as a morning star, evening star or engulfing candle pattern. I must stress that I only analyze a trade when I have a closed completed candle on whatever timeframe I am using.

For example,
If price is inside of consolidation, I will look for one of these candle patterns to occur at support or resistance on the 30 minute chart and I prefer price to be below or above the 20 day EMA according to the rules I mentioned above. Now in reality it isn’t always going to look like that when price is inside of consolidation. The 20 day EMA will often times move in a semi-straight-line through consolidation making it difficult to get a reading.

If this is the case I will only take one of these candle patterns when price has hit support or resistance that I can identify during the consolidation stage.
If there is one of these candle patterns in the middle of this consolidation, I leave it alone as it may be a false move.

The other location I find an entry to use the scalping method is when price has actually broken outside of a consolidation range. What I am specifically looking for is a confirmed closed breakout candle. Afterwards I watch for the retracement to either support or resistance depending on which direction price has broken out. Once price has returned to a support or resistance, again I look for that candle pattern in the direction of the confirmed breakout.

Using this retracement pullback method will also allow for additional forms of confirmation such as finding the support or resistance level with psychological levels, Fibonacci retracement levels and the fulcrum. Additionally old highs and lows will come into play often.


Profit targets:
I am basically looking for 15 to 25 pips as a profit target. This method can be used with only one lot as there is no scaling out of the trade. Comfortably I look for 15 to 20 pips on GBP/USD and approximately 15 pips on EUR/USD.

The stop loss levels are approximately one to one and equal to profit targets however on occasion it is not always possible to make that so and depending on market activity at the time retests are bound to happen. Specifically retests to support or resistance levels that often times will be very close to your stop loss.

If the stop loss levels such as support below the candle pattern that creates the entry is too large and unacceptable to you, pass on the trade and look for another opportunity.

Often times using the 30 minute and the 15 minute chart will provide numerous opportunities to keep stop loss levels within 15 to 25 pips.

That’s basically it.
The tip I would recommend always remembering is only analyze and wait until the candle has closed creating the pattern you’re looking for. Also don’t anticipate price will continue any farther than you planned. Simply take what you intended to from the beginning of your trade and follow your plan.

It is always when we change our plan that we tend to lose.

If you would like to see chart examples please instant message me and I will be happy to forward them or perhaps with enough interest I can post them here on this thread.

Thank you for reading,
good luck.
LC

[anijide]

Please make it more simpler.

Thanks

[Udaytrading.com]

Stop loss levels.
This is always the subject of great controversy.

Perhaps the biggest reason it is such a confusing part of any trading method is that it is specifically tailored to each one of us and often times there is no wrong or right way considering certain environments.

Stop loss levels are valuable and I do believe in using them however what helped me have a better understanding of what a stop loss was and how it could better serve me, was to realize that stop loss levels are basically a psychological and financial safety measure. Using a stop loss level such as 50 or 60 pips is simply what I am comfortable putting on the line and what I am willing to lose. But this stop loss by no means suggests that I can determine that price will retrace no further than 50 or 60 pips. It does absolutely no good trying to impose my will on the markets.

Keeping this one fact in mind also allows me to realize that I must have a certain degree of flexibility when using a stop loss level because real market principles come into play around certain support and resistance levels. If by chance my stop loss level happens to be above or below a support or resistance level that is obvious on a chart, I may consider making some adjustments and widening that stop loss to include that potential support and resistance area. Or I simply have the choice to pass on the trade if it is too large a stop loss.

Stop loss levels should be incorporated into your trading strategy, they are there to protect previously earned profits and to conserve capital.

The best way to determine which stop loss level you should use is to simply back test your trading method and notice how deep a retracement goes against you after you have entered the trade. Often times with enough back testing you will begin to see that certain stop loss levels will be sufficient to keep you in a trade during most retracements.

In the beginning of my trading career while trying to use a demo account I experimented with the idea of not using a stop loss. Now with several years of successful trading behind me I see that it is much easier emotionally and financially to use a stop loss level as opposed to not using one.
To me the pain of not using a stop loss level and watching a trade remain open, aimlessly wandering for endless days or weeks was actually more painful. Than accepting the loss and moving on.

In the next article, I will share some of my ideas of how to correctly use lot size and the correct risk factor when placing each trade, better known as “money management”.
Even though some of the ideas I will share may be misunderstood or provoke some controversy, I will describe the correct way to determine how many lots to use on each trade. It may surprise you to know that it isn't the typical way most mentors and text books will tell you.