How To Use A European Open Forex Strategy

The forex market is large and liquid; it is thought that technical analysis is a viable strategy for trading in this market. It can also be assumed that scalping might be a viable strategy for the.

Using high leverage and making trades with just a few pips profit at a time can add up, especially if your trades are profitable and can be repeated many times over the course of the day. By redundancy in trading jargon, I mean having the ability to enter and exit trades in more than one way. Remember, scalping is high speed trading and therefore requires lots of liquidity to ensure quick execution of trades.

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Moreover, the pair is trading above both its 20 and 50 MAs respectively at 1. The bias remains bullish, The RSI shows upside momentum. Bullish bias above Under pressure, The pair has validated a Rising Wedge: The bias remains bullish, The pair is bullish channel in place since bottom. The downside prevails, The pair remains on the downside, challenging the lower boundary of a bearish channel in place since June. The downside prevails, As long as 0. The upside prevails, A support base at 0.

Further advance, The pair has broken above a decline trend line in place since April. The upside prevails, The RSI is above The bias remains bullish, The pair has broken above the upper boundary of a bearish channel and remains on the upside.

Watch a currency melt down News by Newsroom on US employers added a modest , jobs in July News by Newsroom on What does a rotting currency do when its central bank announces the highest rate in a decade? Tech analysis by Simon Kazinsky on Jobless claims tick higher News by Newsroom on Bank of England raises rates above crisis lows News by Newsroom on Fed on track for a September hike and gradual removal of accommodation News by Newsroom on Also, depending on the currency pair, certain sessions may be much more liquid than others.

Even though the forex markets are trading for 24 hours a day, the volume is not the same at all times of the day. Thus, when two of the major forex centers are trading, this is usually the best time for liquidity.

The Sydney and Tokyo markets are the other major volume drivers. Scalpers need to be sure that their trades will be executed at the levels they intend. Therefore, be sure to understand the trading terms of your broker.

Some brokers might limit their execution guarantees to times when the markets are not moving fast. Others may not provide any form of execution guarantee at all. Placing an order at a certain level and having it executed a few pips away from where you intended, is called " slippage.

Redundancy is the practice of insuring yourself against catastrophe. By redundancy in trading jargon, I mean having the ability to enter and exit trades in more than one way. Be sure your internet connection is as fast as possible.

Know what you will do if the internet goes down. Do you have a phone number direct to a dealing desk and how fast can you get through and identify yourself? All these factors become really important when you are in a position and need to get out quickly or make a change. In order to execute trades over and over again, you will need to have a system which you can follow almost automatically. Since scalping doesn't give you time for in-depth analysis, you must have a system that you can use repeatedly with a fair level of confidence.

As a scalper you will need very short-term charts, such as tick charts, or one- or two-minute charts and perhaps a five-minute chart. It is always helpful to trade with the trend, at least if you are a beginner scalper.

To discover the trend, set up a weekly and a daily time chart and insert trend lines , Fibonacci levels and moving averages. If your charts show the trend to be in an upward bias the prices are sloping from the bottom left of your chart to the top right , then you will want to buy at all the support levels should they be reached.

On the other hand, if the prices are sloping from the top left down to the bottom right of your chart, then look to sell each time the price gets to a resistance level. Depending on the frequency of your trades, different types of charts and moving averages can be utilized to help you determine direction. The price could be heading back to a target of 1.

The daily chart shows the price has reached the Clearly, there is a possibility of a pullback to the trend line somewhere in the vicinity of 1. As a scalper, you can take the short side of this trade as soon as your shorter term charts confirm an entry signal. A forex scalping system can be either manual, where the trader looks for signals and interprets whether to buy or sell; or automated, where the trader "teaches" the software what signals to look for and how to interpret them.

The timely nature of technical analysis makes real-time charts the tool of choice for forex scalpers. Set up a minute and a one-minute chart. Use the minute chart to get a sense of where the market is trading currently, and use the one-minute chart to actually enter and exit your trades. Be sure to set up your platform so that you can toggle between the time frames. Now, before you follow the above system, test it using a practice account and keep a record of all the winning trades you make and of all your losing trades.

Most often it is the way that you manage your trades that will make you a profitable trader, rather than mechanically relying on the system itself. In other words, stop your losses quickly and take your profits when you have your seven to 10 pips. This is a scalping method and is not intended to hold positions through pullbacks. If you find that you can manage the system, and you have the ability to pull the trigger quickly, you may be able to repeat the process many times over in one trading session and earn a decent return.

Remember that too much analysis will cause paralysis. Therefore, practice the methodology until it is automatic for you, and even boring because it becomes so repetitive. You are in the business of scalping to make a profit, not to boost your adrenalin or feel like you are playing in a casino.