Category: Scalping Strategies

Scalping tips

Scalping tips

You have decided you adopt a scalping trading style. Here are scalping tips to keep in mind.

Before starting to scalp:

1) Close down all programs running in the background. If your press ctr+alt+del the task monitor open up and it will tell you what programs are running. You can kill these from this window.

2) Ensure your connection is stable and fast. For those using wireless, it would be even better if you are connected with your cable directly into the router.

3) Ensure you are using a broker that does not delay the execution, as execution is fundamental in scalping. At times you will need to get in and out of a price in less than 30 seconds.

 

Scalping Tips:

1) Execution

Get used to your spread betting brokers trading platform. There are platforms you can customize so that you can organize your charts, your current profit and loss and your order execution buttons so that you have quick access to entering and exiting an order.

Practice a little before trading Big. Most of scalpers loose money in the first month due to execution errors.

 

here is an example of enlarging the trading buttons in :

image

 

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2)  Controlling Your Costs

First of all when Scalping, it is important that you keep costs under control. Scalping is all about taking or giving small profits. If you start letting your costs run these could eat up your profits. What I mean by costs, is not being decisive or convinced on a certain about a trade and you enter a trade to quickly close it. In this situation you have paid the spread. These little costs can add up.

3) Know the market sentiment and trend

You must be prepared when entering your trade. Do your homework before trading; know the general sentiment of the market. Know the direction of the main trend and of the medium term trend. At the beginning it is advisable to stick to the trend. Once you get the necessary experience you can also counter trend.

Below are Forex Spread betting examples of an hourly graph and a 5 minute graph. As you can see in the hourly, you can see the big picture.

Scalping Chart 1hr

Scalping Chart 5min

*if you want to read more on

4) Emotions – Controlling your urge to overtrade

This is the hardest part in scalping but also applies to all styles of trading. Do not over trade. Many traders that start off and maybe never make it, is because they overtrade in the beginning and they start making a lot of little losses to soon find their account so low or in the red that they cannot be impartial in their trading. Therefore it is essential that from the beginning you take control of your trading urges. When you start off scalping you can also play it safe, that is, even if you miss a couple of trades do not feel you are missing out, but see it as market experience. You are currently learning. The market won’t go anywhere.

5) Emotions – Discipline to be patient and stick to your trading Plan

Choose a strategy that suites you and your trading hours. Write it on paper and stick to it. With time you will perfect it but at the beginning this will help you be disciplined to stick to rules. Ensure that the trading strategy you adopt at the beginning of your scalping or spread betting career has a high probability and positive expectancy. Even if at the beginning this means more sitting on the side lines, well being more patient and taking fewer trades. If you trade in the evening you might end up trading only 3 to 4 times.

6) Study or have an understanding of basic technical analysis

It is also important to have a basic knowledge or understanding of technical analysis. The pros and cons of using various indicators; what are their strengths and weaknesses. This will give you a good understanding of your trading system and when it will and will not work.

7) Adjust to market conditions/ Volatility

If volatility increases you need to adjust the size of your trades to cater more for these volatile moves. This is why it is important you know well the of the markets you are trading in that time frame. So in case the market starts moving twice as much as the usual you can halve your sizes.

When scalping, volatility is also necessary. Trading a market that is very quiet or dead will not give you much opportunity.  Many spread betters resort to Forex as there is movement in the Forex market. Scalping is about trading little and lots. Taking lots of profits.

8 ) Last rule – Don’t hang onto losers – Stick to your trading style.

If you are scalping you must have no open positions overnight. Don’t hang onto loosing trades waiting for them to recover.  Learn to take a loss. This is a numbers game. It is fundamental that your winning odds are greater than your loosing odds.

 

I hope these scalping tips have helped. click here to go back to the top Scalping Tips

 

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FTSE100 BB Scalping strategy

Scalping Strategy–FTSE100  5 min Bollinger Bands scalping

Here is a very simple strategy but you do need to familiarize yourself with this strategy before you start using this strategy. It can be effective as it can stop you out quiet frequently. You can trade this on the FTSE100 on a 1min, 5min, 15 min time frame.

Do Not trade this ahead of important data or news.  Do Not Trade when there is a lot of strong bad news or good news in the market as the FTSE100 is likely to take a direction. Best to trade it after the FTSE open and before the 13.30 economic data or US open.  Unless the economic data that is coming out has no importance.

Settings:
Bollinger Bands 50 period, 2 Standard deviation (magenta)
Bollinger Bands 50 period, 3 Standard deviation (blue)
Bollinger Bands 50 period, 4 Standard deviation (orange)

Spread betting Rules:
Go Long when the price crosses the first Bollinger Band (magenta) to the downside, moving towards the second Bollinger bands (Blue), when it fails to reach the blue band and moves back up, this is when you go long, with your stop loss below the low the candle.
If, instead, the prices cross the blue Bollinger band moving lower towards the orange Bollinger band but fail to break the orange band and moves back up towards the centre of the bands, again this is where you buy and go long with stoploss below the low of the candle. Remember, this time while the prices were moving lower they must not have stalled between the magenta and blue. If you get stopped out, just wait for the next signal.

Go short when the opposite happens.
Scenario A. Prices move higher breaking the magenta bollinger band but failing to reach the blue bollinger band. It moves back towards the centre of the bands, go short with stoploss just above the band.
Scenario B. Prices moves past the magenta and blue bands to then stall between blue and orange. At this point, as prices move back into the bands, tanke a short trade with stio above the spike candle.

In both scenarios, being patient and waiting for the correct setup, is the key to trading.

Ideal scenario: when the markets are trading sideways, or the market is quiet with news to come out in a few days and prices are mainly moving sideways with occasional runs up or down.

What to be careful with this is when there is very strong news and the FTSE100 takes a direction. This is a mean reversal strategy, and we don’t want the FTSE100 to move in one direction.

 

Below is a when the strategy works really well. Prices break the first bollinger band then retraces.

 

 

This is a second example of this . Here we get stopped out as soon as prices move in a trend. As you can see from the time, it is after 13.30. There was economic data that made the markets take a trend.

Any queries, post a comment and I will be happy to answer

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Scalping Strategy – The Spike Scalping System

Scalping Strategy – The Spike Scalping System

This is a very simple scalping strategy, but at the same time does require quiet a bit of trading experience. It is scalping spikes. This strategy falls also under Price Action as there are no indicators’ involved. In this strategy Money management Rules are important, and this is the reason why many experienced traders with a strong understanding of support and resistance should trade this strategy. The Spike scalping strategy is a system that looks at pervious resistance and support areas, and waits for price to move back to these areas. Once prices reach the previous support or resistance, wait for the current candlestick to form a long spike but return to it’s starting point. Once the candle closes you can scalp 6-15 points in the opposite directions of the spike, with your stoploss above or below the spike. The Body of the candle must be smaller than the spike.

Here is a to show this strategy:

Scalping Strategy - The Spike Scalping System

In this Scalping Strategy there was a previous resistance point at #1. This was a strong resistance. A Spread Better will wait for prices to test this level again.  In fact at point 2 prices re-test the previous resistance but fail to break this level. Your entry would be at the close of the candle with your stoploss above the high of the candlestick with the large spike.  In this case the spike was 25 points you would look for a 10 to 15 point profit. For those that would like to run their trades, they could do this, no longer being this a scalping strategy. The above scalping strategy is shown on a 15 min chart, to avoid Noise or fake support and resistances. In the case above, a spread better would look to enter a scalping strategy short.

Below is a scalping strategy on a 5 minute chart. As you can see only when there has been a previous resistance or support level and the following candle that tests this level forms a big spike we enter a spread betting trade long or short. Looking to make 10-15 point out of the market.

As you can see from the spread betting example below, the circled candles have small bodies, big spikes in correspondence with previous support and resistance levels.

 

Scalping Strategy - The Spike Scalping System_5min

 

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CCI -1 Min Scalping System

CCI -1 Min Scalping System

This is Forex spread betting scalping strategy, I have used it on an MT4 but can also be applied to other charts
Trade From 8am UK time to 16 UK Time

Time Frame: 1 min

Forex Spread Betting Rules:

Trade Long:
Indicator: CCI (170)
Wait for the CCI 170 to cross the 0 Line showing an uptrend. It must be the first indicator to cross.
Indicator: CCI (34)
Wait for the CCI 34 to cross above the 0 line, also showing an uptrend. This must be the  second indicator to cross in the same direction as the CCI 170
Indicator: RSI
Price must be above the 14 Moving average

Trade Short: (opposite to the above)
Indicator: CCI 170
Wait for the commodity Channel Index (CCI) 170 to cross below 0 line, showing a down trend, and again t must be the first indicator to cross.
Indicator: CCI 34
Wait for the commodity Channel Index (CCI) 34 to cross below 0 line, showing a down trend, and again t must be the second indicator to cross.
Price must be below the 14 Moving average

Settings:
CCI 170 PERIOD 170
CCI 34 PERIOD 34
Moving Average 14

Important: This system relies heavily on support resistance, Fibonacci levels and pivot points. so if you are near near a support and resistance line, wait to see what the price reaction will be. Wait to see if prices break the support and resistance or bounce off these levels. Always follow the trend and look to buy and tops and bottoms.

Forex Spread Betting Examples of the CCI -1 Min Scalping System applied to the EURUSD:

CCI -1 Min Scalping System

In the spread betting example, you can see I only took the longs trades as only in the long signals did the Commodity Channel Index 170 cross above the 0 line before the Commodity Channel Index 34

 

I Thank Canadian Dude for inspiring this Forex Spread Betting Strategy.

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FTSE 100 price action scalping

Time frame: 5 Min / 1 min

FTSE 100

Indicators used / Settings: none  / Price Action

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Entry Rules:

This is a very simple strategy that uses no indicators only price action based on candlestick patterns. I use this scalping strategy on the FTSE 100 trading. It requires a lot of patience but is a very effective trading strategy.  Wait for  shooting star or a hammer to form then enter on the open of the next bar.

In the Pictures below the blue circles indicate YES TRADE . The red circles are NO TRADE.

 

Spreadbetting long:

Spread bet long when a hammer forms near the current lows. In the first example you can see this spread betting scalping strategy applied in the first and second blue circles.

Do not trade when the hammer forms while the prices are moving higher. The example in the second picture below, the third red circle is a failed hammer as it occurs within an up trend.

Spread-betting short:

When to short the FTSE100? when a shooting star forms near the current highs. The signal is stronger if the shooting star forms at a resistance level. Furthermore the longer the shadow, the stronger the signal. In the second spreadbetting example below(pic2), the body of the shooting star is relatively small to it’s shadow(first and third blue circle) – this is a strong signal and one to trade. The second circle (red) you can see the shadow is not that long compared to the  body. This is a riskier trade, and don’t suggest to take.

Exit Rules:

This is a Spread betting scalping strategy, so to take 5 max 10 points out of the market.  Your stoploss above / below the low or high of the shadow.

When it works best?

After a rally or a decline and approaching support or resistance

Here is a spread betting example of this FTSE 100 price action scalping strategy

Spread betting example 1

FTSE 100 price action scalping

 

Spread betting example 2

FTSE 100 price action scalping2

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Alligator Scalping system

Alligator Scalping Strategy

Time frame: 5 Min

Tag: GBPUSD

Indicators used / Settings:

Exponential moving averages

Yellow: Pink:
Ema 3
Ema 5
Ema 7
Ema 9
Ema 11
Ema 13		 Ema 21
Ema 24
Ema 27
Ema 30
Ema 33
Ema 36

Ema 55 Color Red

Possible other spread betting charts:

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Spread Betting Example

Entry Rules:

When the yellow bands cross the pink bands this is your entry signal. I will present this strategy in two ways, for those that are risk averse and for those that don’t mind risk.

Spread-betting long:

Trade Long when the yellow bands cross the pink bands to the upside.  The cross over of the bands should occur above the 55 EMA line.
Risk averse: The above strategy could lead to some false entries as you can see in the second diagram. For those spread betters that are risk averse,  trade the rebound: After prices have broken to the upside, wait for the , that is prices to come back down into the pink bands  then trade long.

Spread-betting short:

Spread betting short is the opposite. Trade short when the yellow bands cross the pink bands to the downside.  The cross over of the bands should occur below the 55 EMA line.  for those risk averse

Exit Rules:

This is a scalping strategy, therefore keep to your money management rules.
on GBPUSD: use a target of 5-10 points and a stop loss of about 15 points. These targets could change according to what you are trading, You should determine your money management rules.

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*best time for this strategy is on the European open or after a move has started.

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Here is a spread betting example of the Alligator Scalping system strategy on GBP USD

Arrows indicate entries. the risk averse spread betters would only scalp the yellow arrows.

Alligator Scalping

 

Here is an example of the disadvantage of this system. you might get false break outs.  A risk averse trader will avoid these false breakouts, as he trades only the retracements (indicated above by the yellow arrows).

 

Alligator Scalping_2

 

Below the spread betting example shows various entries. and the red arrow is the trader being stopped out.

Alligator Scalping_3

 

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ADX and Bollinger Band

ADX and Bollinger Band spread betting strategy

Time frame: 5 Min

Indicators used / Settings:

(14)

(20, 2)

 

Charts used: FTSE 100

Possible other spread betting charts:GBP

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Entry Rules:

When the ADX is above 25, this indicator tells you that a trend is underway. The whole point of this scalping  the FTSE strategy, is to find moments when there is no trend and the FTSE 100 is trading sideways or is consolidating after a move.  The whole purpose of this is to be patient. Once the FTSE 100 is consolidating you apply a mean reverting spread betting strategy. 

 

Spread-betting long:

When the ADX is below 25, as the UK100 has stalled after a strong trend, or there is no news and the FTSE is trading sideways. Wait for the prices to drop and touch the lower band. As you see the prices reversing going back up towards the middle 20 moving average line, spread bet  long.

You don’t want the price to break the band and close below the band. If the current candle closes below the lower band wait for the first candle to close back above the lower band. Then trade long.

 

Spread-betting short:

Again the ADX is below 25 and the FTSE is trading sideways. Wait for the prices to move up towards the upper band. As you see the prices reversing going back down towards the middle 20 moving average line, spread bet  short.

Ideally you want the prices to touch the bands and move lower / higher. If the prices close above the bands wait for the next bar to close inside the bands.

Strategy does require patience.

 

Exit Rules:

This is a scalping strategy. Use 5 – 10 point profit and 10 – 15 point stop loss.

stop loss: 15

target: 5-10

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Here is a spread betting example of this ADX and Bollinger Band strategy applied to the FTSE100

 

FTSE 100 - Scalping 5 Min ADX BB

 

In the spread betting example below of the uk100. Prices did bounce off the lower Bollinger band, but failed to move higher. Be careful when prices do not follow through past the middle SMA heading towards the top band. , could indicate a change in trend.

FTSE 100 - Scalping 5 Min ADX BB_2

This spread betting strategy can also be applied on :

FTSE, DJI, GBP, Oil

Back to spread betting scalping strategies

5 Min GBPUSD

Time frame: 5 Min

Indicators used / Settings:

  • Parabolic SAR : (0.1, 0.11)
  • Moving Average : SMA 20
  • MACD:(5, 8, 9)

Charts used: GBP

Possible other spread betting charts:

FTSE 100, DAX, EURUSD

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Entry Rules:

Spread-betting long:

The Parabolic SAR will give you the direction. Therefore you wait for the Parabolic SAR to be below the price. When you see the candle stick bar close above the moving average and The MACD histogram is above the 0 line, this is an indication to spread bet long. You could be spread betting in the evening this trading strategy as the GBPUSD gives you enough movement also in the evening

Spread-betting short:

Going short is the opposite, wait for the Parabolic SAR to be above the price. When you see the candle stick bar close below the moving average and The MACD histogram is below the 0 line, this is an indication to spread bet long. You could be spread betting in the evening this trading strategy as the GBPUSD gives you enough movement also in the evening

 

Exit Rules:

stop loss: 12 point

target: 3 to 5 ticks target

This is a spread betting scalping strategy therefore the following money management rules apply. Use a 12 point stop loss and try scalp the market for 3 to 5 ticks target. how to determine if using 3 or 5 ticks? well if the moving average is sloping or not this will indicate if the pair is trending. in a trending market you could take more points out of the market in a quiet sideways market just look for 5 points.

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Here is a spread betting example of this  scalping strategy:

 

Scalping Strategy- MACD-PARSAR-MA_2

 

 

 

 

 

 

Further spread betting examples / I spread bet this trading strategy at times on :

FTSE 100

 

Scalping Strategy- FTSE100 - MACD-PARSAR-MA