A scalp by definition is a reward equal to or less than the risk. It is a tiny profit. I often scalp on the 1 hour timeframe. Much more comfortable than lower TF’s.
Each to his own.
Scalpers live in a delusional world when they think that they will be able to predict the market consistently with a 10, 15 or 20 pip stop. its not going to happen, and it wont happen because it isnt the scalpers that determine the rules of the market ( how price moves ), its big institutions.
And they dont give a ■■■■ about 20, 30 or 40 pips or even more, they want to accumulate their positions, and they do it in a whide range, and in that range they will move the price randomly, up and down to accumulate their positions, if you are scalping you are just playing a guess game, if price will go up or down.
The only way to be profitable is to try to understand what they are doing ( are they buying or selling ), its not easy to do, but its their game and their rules, our only chance is to play by their rules and try to follow them.
Most people cant predict what the market will do the next hours or the next days, but they think they will predict what price will do in the next 30min or the next hour.
1 Like
I would say that volatility should be your number one topic to search on market. Second would be risk management. But, if you are just starting, than it would be better to start on demo account first.
I’m not fully consistent myself yet, but I’ve found a lot of benefit and made improvements by watching some of the live traders on YouTube, they discuss their entry, SL and TP, I’ve seen a lot of speculation about them but IMO they’re predicting the market live.
Personally knowing your HTF direction and trading in that direction is lucrative, securing profits is key, and letting small positions run to HTF (4hour or daily) target levels with stops at break even can lead to some nice added profits.
Not a solid strategy but just some food for thought.
you should have to also check risk management and the lot you gonna trade on that time , so on you can start your trade with sl and tp or else you account will be zero at once
@Aleks299 : it looks your topic is interesting. However, I have a few questions:
Low RSI is how much? 30-50? what number in your mind?
is it (RSI) on 1m &5m time frame or long-term ?
if I buy against the trend, and if the trend continues downward then how do I exit? with a little loss?
here some experienced folks mentioned playing in the rulebook of the institutions. Your views please.
1m & 5m -is not it too short to cope with? The trend may change into up or down in that TF.
Thank you.
RSI in area of 30 or 70, preferably on 5M time frame.
DO NOT buy against the trend as a noob, follow the trend. Learn to work with trend lines. So f.e. If the trend is upward, you wait and buy untill the candelsticks have crossed the trendline downswards and the RSI is around 30 and vica versa.
Institutions have very little impact on this way of scalping as it’s very very short term. You are satisfied with small profits and don’t take too much risk. Have a goal in mind like 20 dollars and sell as soon as you reached it or set a trailing Stop Loss. Do not get greedy and go for the big money. This strategy doesn’t work like that. Small profits, small build up.
#Thank you. What about slippage and broker commissions?
I would first like to define what scalping really is, instead of what most think it is. Is that okay?
Scalping by definition is a system of trading whereby you take less than a swing profit. What is a swing profit? Anything that is above 1:1R/R. So with that knowledge we can surmise that scalping is defined as taking profit less than a 1:1 R/R.
Another misconception is that scalps can only be taken on lower timeframes like 5Min/3 Min/1 min. This is just not true. I personally take scalps off the 1 hour timeframe all the time. How can this be, you ask? Simple.
If I am momentum scalping, as an example, I will find a strong 1 hour candle (let’s say bullish green, closing on its high) and immediatley buy the close. I place my stop just below the candle. I am betting that, since it is such a strong bullish candle that price will follow through at least a little.
Let’s suppose the length of the entire candle with wicks is 20 pips. I wait for price to get get betwen 15-20 pips in profit and then immediately close the trade. Because my profit was 1:1 R/R or less I made a scalp.
@TP89 :
That makes good sense. But if the trend goes aginst you after you took the position, what do you do?
What price range & Quantity covers the Slippage & Commissions? an average tips.
How do you scan the DOW?
Ah yes, glad you asked. This is what I love about forex. With the spread system, I can see what I am paying in commissions with every pip that goes by. With other instruments, you have to calculate everything on the back end, which is a pain.
With that said, I think it is important to trade a timeframe where the spread does not hinder profits too much. Right now, for me trading mostly EU, that’s the 1 hour chart.
The reason is, the minimum scalp you should take is 10 pips. You are hard pressed to get a 10-pip ATR until the 1-Hour chart. If you try and trade a lower TF, the spreads will eat you alive.
True!
Thanks for your kind insights. Folks will get good ideas on “Scalping”. I myself don’t have much experience with it. Frankly.
Been practicing on demo for a while now, can’t wait to go live. Just thinking if placing sl close to entry is playing a bit too safe or if it’s ok. I’ve been told by some traders to be flexible with my trading plan while others tell me to not define things like my SL values as this way I’ll be limiting my profits. What’s the right thing to do. Pl help!
Hello,
Thanks you asked for it.
Here most experts will advise to set SL. I found that is the only way to lose money. I never made any money setting the SL. This is the trap rather I would say. I found mental SL (tho difficult) is the best way to do forex or stock trading.
is $2 commission rate okay in your opinion?if i’m trading 30 min timeframe?
Mental sl? know only of trailing sl this far. care to explain pl
It’s actually up to your broker. Most commission rates are based off of two models:
- Spread only, which is what most brokers use.
- Spread plus commission, which in reality is the same thing as the spread only model. Scalpers tend to like this better since the spreads are much tighter. The broker makes up for it by charging commission on top of a small spread based on how many lots you trade. ECN brokers often have this setup, but some market makers like Oanda are incorporating this type of hybrid model also.
Of course, you may have to also pay a swap fee for holding a position overnight. Check with your broker to see if they charge this.
It’s all very complicated, so it is best to check with customer service-- If there isn’t one, I would consider making a switch. Hopefully, they can clarify for you what you are paying per trade.
1 Like
from what I gather we have to invariably pay more or less the same amount - whether we pay in the form of only spreads, only commissions or a mix of both.
Golden rule of scalping: use a broker that does not cost a bomb for every trade. Obviously your trade volume is gonna be high, and each time you shouldn’t be shelling out a big number just to make your trade. And again, beware of those that charge no commissions at all!
The definition is to make less money than that risked?
Wow I didn’t even know that - now it makes even less sense than I originally thought.
I mean why would anyone want to do that?
Call me old fashioned but that’s a seriously screwey idea to me.
1 Like