THERE IS NO FIXED SPREAD IN FOREX! This is a MYTH that is propagated by the FIXED SPREAD BROKERS.
FOREX is an AUCTION. The price is the price of the last trade. All that remains are buyers bidding and sellers offering. The BID/ASK changes. Sometime the spread is narrow, sometimes the spread is wide, sometimes there is no spread and sometimes the spread is crossed. The last 2 are rarely occur. But the point is THERE IS NO FIXED SPREAD!!
All you have to do is sign up for a free demo on an ECN like MBT and run it side by side with your FIXED SPREAD BROKER(FSB). You will see the fixed spread brokerās bid is at/below the ECNās bid AND you will see the fixed spread brokerās ask is at/above the ECNās. THIS IS HOW THEY TAKE YOUR MONEY.
Go ahead and ask your FSB where their Level II (Market Depth) screen is. They wonāt have one because they do NOT want to you know the truth.
I have the MT4 bid/ask on one screen and the ECN bid/ask right next to it. I watch the price movement and can spot scalp opportunities based on the movement of the FSB compared to the ECN. If something isnāt ānormalā, thatās an opportunity!!
The spread is only ātakenā once. If you enter long at 1.5010 and exit at 1.5015 then you make 5 pips but the price had to move 5 pips PLUS the spread for you to make your 5 pips.
MBT charges commission per each trade. Once when you enter and once when you exit. The commission is almost always less than the FIXED SPREAD being charged. The commission is less than 2 pips when I trade USDJPY. That means I can bail out of a trade at a 2 pip gross and make money. YOU CANāT DO THAT WITH A FIXED SPREAD BROKER.
What you are looking to do is enter and exit the trade quickly with a small profit.
Many times, right before a major news release, the price will swing 10 or more pips. If you time it right, you can be in/out in seconds with 5 or more pips.
Some people laugh at 5 pips but I am smiling because my account grows 2 % or more a day.
I also use my BUY ZONE method to scalp. This takes advantage of the price movement based on the average hourly range:
The while line is the H1 open.
The average H1 range over the last 24 bars for the USDJPY is 20.33 pips.
The blue line is the long trigger and is the open + 4 pips.
The red line is the short trigger and is the open - 4 pips.
The green lines are the TP set at open +/- 10 pips.
You can see in the chart how the price cuts through the lines. Price has to. The lines are 8 pips wide and the average range is 20+ pips. No matter how you place it, a 20 inch ruler canāt fit in an 8 inch box. It will stick out one end, the other end or both ends. Do you see the opportunity to scalp for a few pips?
Ok then, as those companies are āhiddingā this system, they must also take 2 times the non existant spread. When one enter the price they give the āfalseā worse and same for exit.
All you have to do is sign up for a free demo on an ECN like MBT
Your referer name was useless.
and run it side by side with your FIXED SPREAD BROKER(FSB). You will see the fixed spread brokerās bid is at/below the ECNās bid AND you will see the fixed spread brokerās ask is at/above the ECNās. THIS IS HOW THEY TAKE YOUR MONEY.
Go ahead and ask your FSB where their Level II (Market Depth) screen is. They wonāt have one because they do NOT want to you know the truth.
I agree about the fact that they send the ball to each other asap you start asking about the spread and where it comes from. Iāll go deeper about this.
I have the MT4 bid/ask on one screen and the ECN bid/ask right next to it. I watch the price movement and can spot scalp opportunities based on the movement of the FSB compared to the ECN. If something isnāt ānormalā, thatās an opportunity!!
It is a start to see the method ā¦ You donāt need charts anymore then ?
The spread is only ātakenā once. If you enter long at 1.5010 and exit at 1.5015 then you make 5 pips but the price had to move 5 pips PLUS the spread for you to make your 5 pips.
True if the bid/ask donāt change values in the mean time ā¦
MBT charges commission per each trade. Once when you enter and once when you exit. The commission is almost always less than the FIXED SPREAD being charged. The commission is less than 2 pips when I trade USDJPY. That means I can bail out of a trade at a 2 pip gross and make money. YOU CANāT DO THAT WITH A FIXED SPREAD BROKER.
True, impossible to do that with an FSB and only REALLY interesting if you plan to do that amount of pips per trade. When you use other methods, these 2 lost pips arenāt really relevant, right ? It is then linked to the used method.
Does that make it clearer?
A little bit. Would love more materials to discuss like snapshots and comments on real trade.
Scalping isnt that special. You are using a smaller time frame and entering many trades. You can use the cross strategy which works well if you have a good setting for a momentum indicator. Enter a trade on your trading rules use trailing stops aim for TP of 3-8 pips. Dont trade against the next larger time frame. If the 15 mi charts indicate an upward trend dont sell the pair on a 5 min charts. As you can see I didnt say use this trading strategy or that one. I can recommend one if you want. The system I use it works for every pair and tailor for scalping. Try to adapt your trading system to a smaller time frame and hit your small goals if your successful 8 out of 10 times your still a winner. On average I make anywhere between 20-30 trades a day and I hit about 85-90% of the time.
Thanks for your explanation and i can see that you are cautious on the use of it. You have developed a method and guidelines for it that i would be pleased to learn if you agree and anyway would appreciate your recommendation.
Nevertheless, allow me to make a little bit of statistics. Say you have 30 trade a day (wow). You may win at best 3 pips per trade. That makes a global of 90 pips a day. If you have 90% win, then you have less than 80 pips a day, right ?
Then, this is not net profit. You have to remove the commission fee of MBT. How much that may be ?
Look at the D1 and H1 candles. Never trade against the H1 candle color unless itās for a quickie.
When D1 and H1 are the same color, go with the flow (trend). I use my TRO MULTI METER CANDLE COLOR indicator (ATTACHED) so I can see all the candles colors without having multiple charts.
I am not sure , But I personally still use a spread broker not a ECN pass through broker. And aim for 5 - 10 pips after spread and there are plenty oppurtunities for short term tradesā¦ make 10 or so and up 100 pips. But lots of time where you enter for a scalp trade gains can be lots more because you still aim to trade with the trend trades as this is safer and sanerā¦
I am posting a chart showing some trades from friday. This is EUR/USD spread is 2 pipsā¦
The yellow arrows are the points I used to draw the trendline. Then trades are where the red arrows are, The trades where with the trend. Could also have traded back up against trend as there is a good line on other side also but higher risk. The Blue arrows are large number trades at 50 and 00. Price bounces at these areas most of the time.
Again this isnāt proper scalping but short term trades in and outā¦
I will PM you the setup. I usually stop around 60 pips per day. I make about 50-60 pips a day. The max trades I would make a day is probably is 30 if I got a 90% win it would be 135 pips I aim for 5 pips. I trade with Oanda to get 5 pip I would need to make 5.9-6.5 pips. I traded during the New york and London time. You have to be cautious, you need money management you need to have discipline. Its not different to anything else. You will be at your computer at lenth. There is barely enough time to use the bathroom. Know what your getting into.
The method is actually frowned upon and scalping is not allowed in the annual trading contest. But the gains are amazine ā¦ but u should have amazing reflexes ā¦
This isnāt the most offensive portion of this forum. The most offensive portion of this forum are the so called Honorary X whatever flexing their sad online muscles and threatening to ban someone because they make them look foolish, rightfully I might add. My point it, you became honorary whatever or master contributor whatever because you live on this forum; not because you have anything of substance to get across someone.
