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Scalping Forex For A Living

By June 2, 2020 how to

If you’re thinking whether or not you can or should start scalping Forex for a living, you may already have asked yourself quotations, like “Is Forex scalping profitable?” or “What’s the most profitable Forex scalping strategy?”, or even already tried to research the best Forex pairs to scalp. These and other acute questions have been answered by the traderXlab experts. As a bonus, you will also learn a popular 1 minute scalping strategy, a powerful 1 min scalping system, used by many professional traders.  

Is Forex Scalping Profitable?

Is Forex scalping profitable? You probably already know the answer to this question, otherwise, there wouldn’t be a reason for scalping to be a popular way to trade. 

Scalping is a trading style that focuses on taking as many small profits as possible within a short time period. Belonging to the general category of daytrading, scalpers are considered to be highly active and focused traders that leave no room for hesitation or stress. It is possible to earn big profits with scalping Forex strategy, but this is definitely not the style for the faint of heart.

Risk In Forex

First things first, just like any type of investment or trading style, scalping Forex involves risk. In fact, risk in Forex scalping is amplified by the fact that a scalper (a trader that utilizes scalping strategies) performs a multitude of trading operations per day. 10s and 100s of trading actions that require a timely execution, precision and high stress tolerance. While it is possible to scalp trade by the minute, one has to remember that not all trades are destined to be successful and profitable.

You can significantly reduce the risk in Forex scalping by attending free webinars, hosted by traderXlab experts, or by having a one-on-one consultation with your Financial Advisor. 

Best Forex Pairs To Scalp

Just like a trader selects a particular trading style and strategy to best suit his objective and personality, the choice of the best Forex pairs to scalp is down to the same exact reason. We have analysed the most popular Forex pairs scalpers prefer to trade and why you may want to pick a certain currency pair over another. If you’re serious about getting down to scalping Forex for a living, understanding the basics is key.

USD / EUR

The United States Dollar (USD), besides being the currency of the world’s largest economy, it is also at the top list of the most extensively traded currencies. The USD serves as the official currency in a number of countries, including Ecuador, Zimbabwe, US and British Virgin Islands,  Federated States of Micronesia, American Samoa and others. 

The EUR, circulating within the European Union, is the second most powerful currency. The combination of both currencies makes the USD/EUR pair the most fierce from the market share and liquidity perspectives.

It is important to note that when estimating the potential risk in Forex trading, the US dollar / Euro pair has a tendency to positively correlate with the GBP/USD. On the other hand, the pair also negatively correlates with the USD/CHF.

USD / JPY

The second best Forex pair to scalp is the all-time favourite USD and the Japanese Yen (JPY). This Forex pair is sensitive to political and economical news as it reflects the relationship between the two mammoth economies. This currency pair has acquired “Gopher” as a nickname among professional traders. The US Dollar / Japanese Yen pair correlates positively with USD/CAD and USD/CHF pairs. 

GBP / USD

The “Cable” is the nickname for this cross-Atlantic Forex pair, admired by many scalp traders. According to the results of our research, this is the third best Forex pair to scalp, which tends to positively correlate with the EUR/USD and negatively correlate with the USD/CHF.

USD / CHF

Swiss franc (CHF) is often referred to as a safe haven currency for traders during turbulent times. The currency pairs this Forex couple negatively correlates with are EUR/USD and GBP/USD. The USD/CHF pair is also known as the “Swissie” rounds up the list of best Forex pairs to scalp.

Foolproof 1 Minute Scalping Strategy

Whether you’re just starting off with scalping or already looking for ways to improve your technique, the following 1 minute scalping strategy can be applied to trading using any currency pair that involves majors. 

We recommend practicing this scalping strategy on the Demo account prior trading with real money. We’re going to work with the following indicators: MACD, Bollinger bands (18 period), 3EMA indicator and RSI.

Scalping Forex – Entry Points

1 minute scalping strategy is based on using a 1-minute chart. Entering a trade is possible in either of the two ways: long or short entry.

Should you choose to proceed with the long entry, wait for the 3EMA to cross above the 18 Bollinger bands middle line. Also, the RSI has to be above 50 and the MACD histogram needs to be above 0.

The short entry requires for the 3EMA to cross below the 18 Bollinger bands middle line. This time, you must wait until the RSI is below 50 and the MACD histogram is below 0.

Powerful 1 Min Scalping System – Place Your Stop Loss

The secret of how you can turn this system into a profitable Forex scalping strategy is to place your Stop Loss about 4 pips on either side of the Bollinger bands middle line.

Scalping Forex For A Living – Exit Points

The golden rule of profitable Forex scalping is to exit the trade when 1 or more of the 3 conditions for entry are not met.

Exit a long trade when the RSI drops below 50, the MACD histogram is below 0 or the 3EMA crosses below the 18 Bollinger bands middle line.

Exit a short trade when the RSI is above 50, the MACD histogram is above 0 or the 3EMA crosses above the 18 Bollinger bands middle line.

Summary

Scalping Forex for a living can be achieved when a trader is able to implement a profitable forex scalping strategy, like the 1 minute scalping strategy. The powerful 1 min scalping system combined with the Stop Loss allows scalpers to minimise their risk in Forex trading. Choose the best Forex pairs to scalp and stick to the strategy.

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