Forex Scalping

Forex Scalping

What is forex scalping?
Forex scalping.

Forex scalping is a forex strategy where the trader only keeps his positions open
for very short periods, with the aim of quickly catching small profits.
This can be a very profitable way of forex trading.
The time that the position remains open ranges from a few seconds to a maximum of 2 minutes.

In fact, there is no more talk of forex scalping than normal intraday trading.
The target profit per trade is usually between the 1 and 5 pips
In theory, it is also possible to set up a forex scalping strategy with the expected profit between 5 and 15 pips net, but in that case the position will have to be held longer for longer than 1 to 2 minutes.

forex scalping

How does scalping work in realtime?

The trader must first consider a working system.
The most important part of any forex scalping strategy is at least risk management.
The difference between profitability and profitability is in fact risking only a small part of the total capital and quick packing of any profit.
After all, anyone who already has some experience in trading in the online currency market knows that it is not possible to deal with profit is an unprecedented risk if unable to accept / cause loss.
Successful scalping means risking 1% up to 2% of your total capital.

If you work with very small profit margins, there is no room for greater loss.
The scalper develops a fixed, elaborate strategy that is not deviated from.
At our course you learn evrything about Scalping and Swing trades. So if you intrested in scalping but never did scalping before please contact me for some more information.

 

forex scalping

Are you looking for a very good broker with low spreads and good profits? stop looking! Best broker: IC MARKETS.

Forex terminology

Forex terminology

Forex terminology

Forex terminology .

It is very important to understand the terminology in the Forex market. That’s way I need your full focus right now! Make your head clear, drink a cup of good coffee and start learning these important terms.

Forex terminology – PIP 

You’ve met the PIP yet.
Cute little happy word isn’t it? Well that’s exactly what it is since this cute little word will make you very happy and rich if you use it the right way.
You need to completely understand how to calculate your wins and losses through the PIP.
Otherwise don’t even bother start trading.
The unit of measurement that indicates the change in value between two currencies is what you call a ‘pip’.

Forex terminology
If the EUR / USD pair rises from 1.2250 to 1.2251, then the .0001 USD increases in value 1 PIP. Simply, a pip is the last decimal figure of a quote. Most pairs are shown to four decimal places, but there are exceptions such as the Japanese yen (to two decimal places).

But watch out! There are brokers that show currency pairs different from the standard “4 and 2” decimal, but instead using’5 and 3′ number decimals.
What they actually do is showing fractional pips, “which are also called ‘pipettes.

For example: GBP / USD 1.51542 1.51543 moves, then it rises .00001 1 PIPETTE. As each currency has its own relative value the value of the pip must be calculated for a specific currency pair.
We give an example in which we use a ratio of 4 decimal places. In order to explain the calculations easier we exchange ratio set down like – so: EUR / USD at 1.2500 is “1 EUR / USD 1.2500.

Example exchange rate:USD/CAD = 1.0200; or 1 USD to 1.0200 CAD; or 1 USD/1.0200 CAD.
(The value change in the “counter currency”) X (the exchange ratio) = pip value (in terms of the base currency)

Continuing this example, if we sell 10,000 units USD / CAD, then one pip change of exchange rate changes of approximately 0.98 in the position value (10,000 units x 0.00009804 USD / unit).
We say “approximately” because when the exchange rate changes, the value of each pip move is also changing. Last important question that needs to be answered if you calculate the pip value of your position is: ‘What is the value of your pip in terms of your account currency?’ You’re trading at an international market you remember? So not everyone on the whole world has chosen the same currency for their account.
Shortly, the value of the pip needs to be converted to the currency used at your account.

Forex terminology – Spread.

Simply spread is the difference between bid and ask price. Spread is used by brokers to make money of every trade that takes place through their network. Example: Broker pays 1.3600 and sets the price at 1.3601 for you to buy. Spread will always be around the price the broker paid. Whenever your trade you’ve paid the spread. There is nothing you can do about it. That’s just the way brokers make their money. TIP: search for a website “broker” with the smallest spreads.

Cross Rate. ( Forex terminology )
The exchange rate between two random currencies that are not considered standard in the country where the pair is quoted. For example: the quote of the GBP/JPY pair would be considered a cross rate in the U.S. While EUR/USD is a cross rate in Japan.

Leverage.
In Forex trading the use of leverage is pretty common. Leverage needs to be completely understood because it plays an important role in the purchasing power of your account.When opening an account you have the option to chose your leverage. It simply gives you the opportunity to trade bigger positions than your real bankroll let’s you.

Forex terminology

Just to give you an example:
Suppose you have a thousand euros on your account and you act with a leverage of 10: 1, you can then buy 10,000 EUR / USD. Then, when the price increases on the pair two cents per euro it means that you have earned 200 euros after you close the position. It can also happen that the price of a penny decreases and then you have a loss of two hundred euros when you close the position.Your profit or loss is actually the difference between the amount on your account and the outstanding gains and / or losses.

⦁ Margin. ( Forex terminology )
Margin is the ammount needed to buy a new position. With a margin balance of €1.000,- and a 1% margin requirement you can buy a maximum position of €100.000,- euro. With this given you are able to use a leverage of 100:1.
The higher your leverage the more margin you will need on your account. So, when you open to many positions or your losing position is going further down the balance on your account could be too low to meet your obligations. When this happens your broker will give you a so called “Margin Call”. This means you need more margin (account balance) to hold on to your position. Most of the time when the margin percentage gets under 50% your broker will close that particular position with a loss.
When you decide to trade with big leverages or open a lot positions simultaneously you have to be careful because you don’t want to get that Margin Call.

Word of advice:  Calculate your lot sizes to prevent big losses.

Best broker: IC MARKETS.

Major currencies Forex

Major currencies Forex

Major currencies Forex

Major currencies Forex

US Dollar – Major currencies Forex.
The United States dollar is the world’s main currency
a universal measure to evaluate any other currency traded on Forex.
All currencies are generally quoted in US dollar terms.
Under conditions of international economic and political unrest, the US dollar is the main safe-haven currency, which was proven particularly well during the Southeast Asian crisis of 1997-1998.
As it was indicated, the US dollar became the leading currency toward the end of the Second World War along the Bretton Woods Accord, as the other currencies were virtually pegged against it.
The introduction of the Euro in 1999 reduced the dollar’s importance only marginally.
The other major currencies traded against the US dollar are the Euro, Japanese Yen, British Pound and the Swiss Franc.

Major currencies Forex

Euro -Major currencies Forex.
The Euro was designed to become the premier currency in trading by simply being quoted in American terms.
Like the US dollar, the Euro has a strong international presence stemming from members of the European Monetary Union.
The currency remains plagued by unequal growth, high unemployment, and government resistance to structural changes.
The pair was also weighed in 1999 and 2000 by outflows from foreign investors, particularly Japanese, who were forced to liquidate their losing investments in euro-denominated assets. Moreover, European money managers rebalanced their portfolios and reduced their Euro exposure as their needs for hedging currency risk in Europe declined.

Major currencies Forex

Japanese Yen – Major currencies Forex.
The Japanese Yen is the third most traded currency in the world; it has a much smaller international presence than the US dollar or the Euro. The Yen is very liquid around the world, practically around the clock. The natural demand to trade the Yen concentrated mostly among the Japanese keiretsu, the economic and financial conglomerates. The Yen is much more sensitive to the fortunes of the Nikkei index, the Japanese stock market, and the real estate market.

Major currencies Forex
British Pound – Major currencies Forex.
Until the end of the World War II, the Pound was the currency of reference. The currency is heavily traded against the Euro and the US dollar, but has a spotty presence against the other currencies. Prior to the introduction of the Euro, both the Pound benefited from any doubts about the currency convergence. After the introduction of the Euro, Bank of England is attempting to bring the high U.K. rates closer to the lower rates in the Euro zone. The Pound could join the Euro in the early 2000’s, provided that the U.K. referendum is positive.

Major currencies Forex

Swiss Franc – Major currencies Forex.
The Swiss Franc is the only currency of a major European country that belongs neither to the European Monetary Union nor the G-7 countries. Although the Swiss economy is relatively small, the Swiss Franc is one of the four major currencies, closely resembling the strength and quality of the Swiss economy and finance. Switzerland had a very close economic relationship with Germany, and thus to the Euro zone. Therefore, in terms of political uncertainty in the East, the Swiss Franc is favored generally over the Euro.
Typically, it is believed that the Swiss Franc is a stable currency. Actually, from a foreign exchange point of view, the Swiss Franc closely resembles the patterns of the Euro, but lacks its liquidity. As the demand for it exceeds supply, the Swiss Franc can be more volatile than the Euro.

The Canadian Dollar and the Australian Dollar are also part of the currencies traded on the Forex market but do not count as being part of the major currencies due to their insufficient volume and circulation. They can only be traded against the US Dollar.

Major currencies Forex
Canadian Dollar – Major currencies Forex.
Canada decided to use the dollar instead of a Pound Sterling system because of the ubiquity of Spanish dollars in North America in the 18th century and early 19th century and because of the standardization of the American dollar. The Province of Canada declared that all accounts would be kept in dollars as of January 1, 1858, and ordered the issue of the first official Canadian dollars in the same year. The colonies that would come together in Canadian Confederation progressively adopted a decimal system over the next few years.

Major currencies Forex

Want to know more about our Signals or Coursebook with memberzone?
Please contact us!

Best forex broker!

 

Forex Charts-Explained

Forex Charts-Explained

Forex charts

Forex Charts.
There are three different charts of use when trading at the Forex market. Let me introduce you to them: Line charts, bar charts and candlestick charts. We have a strong preference for the candlestick charts because they give us the most information.

-Line Charts
A chart with just one line the shows us the movement of the quote.

Forex charts

Line charts are easy to read and show us the trend. Also good at use to see the Support & Resistance levels.
Allthough the line chart gives us information about the history of the pairs price, it’s hard to see the individual prices.
-Bar Charts
The Bar charts show us individual prices for a certain time period. Every bar has it’s own information and will so give you a more accurate view of you positions. The bar has an open, high, low and closing point.

bar charts

-Candlestick charts.
Most traders use the candlestick chart because they tell us a lot of clear information. Especially the Price Action is really recognizable.
Don’t get confused, the candlestick shows us the same information as the bar charts, however it’s easier to read. Candlesticks give good information about the highs and lows at a certain timeframe.

Japanese Candlestick Trading

Back in the day when Godzilla was still a cute little lizard, the Japanese created their own old school version of technical analysis to trade rice. That’s right, rice.

A Westerner by the name of Steve Nison “discovered” this secret technique called “Japanese candlesticks,” learning it from a fellow Japanese broker. Steve researched, studied, lived, breathed, ate candlesticks, and began to write about it. Slowly, this secret technique grew in popularity in the 90’s. To make a long story short, without Steve Nison, candlestick charts might have remained a buried secret. Steve Nison is Mr. Candlestick.

Want to learn more about Candlesticks? Download the Free E-BOOK!

What is a PIP?

What is a PIP?

what is a pip?

What is a PIP?

PIP
You’ve met the PIP yet. Cute little happy word isn’t it? Well that’s exactly what it is since this cute little word will make you very happy and rich if you use it the right way.
You need to completely understand how to calculate your wins and losses through the PIP. Otherwise don’t even bother start trading.
The unit of measurement that indicates the change in value between two currencies is what you call a ‘pip’. If the EUR / USD pair rises from 1.2250 to 1.2251, then the .0001 USD increases in value 1 PIP. Simply, a pip is the last decimal figure of a quote. Most pairs are shown to four decimal places, but there are exceptions such as the Japanese yen (to two decimal places).

But watch out! There are brokers that show currency pairs different from the standard “4 and 2” decimal, but instead using’5 and 3′ number decimals. What they actually do is showing fractional pips, “which are also called ‘pipettes. For example, GBP / USD 1.51542 1.51543 moves, then it rises .00001 1 PIPETTE.
As each currency has its own relative value the value of the pip must be calculated for a specific currency pair.
We give an example in which we use a ratio of 4 decimal places. In order to explain the calculations easier we exchange ratio set down like – so: EUR / USD at 1.2500 is “1 EUR / USD 1.2500.

Example exchange rate:
USD/CAD = 1.0200; or 1 USD to 1.0200 CAD; or 1 USD/1.0200 CAD.

(The value change in the “counter currency”) X (the exchange ratio) = pip value (in terms of the base currency)

Continuing this example, if we sell 10,000 units USD / CAD, then one pip change of exchange rate changes of approximately 0.98 in the position value (10,000 units x 0.00009804 USD / unit). We say “approximately” because when the exchange rate changes, the value of each pip move is also changing.
Last important question that needs to be answered if you calculate the pip value of your position is: ‘What is the value of your pip in terms of your account currency?’
You’re trading at an international market you remember? So not everyone on the whole world has chosen the same currency for their account. Shortly, the value of the pip needs to be converted to the currency used at your account.

 

what is a PIP

Trading strategy

Trading strategy

Trading strategy

The difference between a professional Forex trader and an amateur is like a boxing match between an Olympic champion and your neighbor. A professional trader is able to predict the future better due to good strategies that he or she has developed. The professional trader knows everything about risk management and how to keep himself under control and never get emotions the better of him.

You’ve got to be strong psychologically to make more and more winning trades. You’re not always going to make winning trades, sometimes you will make a bad one. The art of the game is to minimize your loses and maximize your winnings. Sounds simple right? Keep on reading and you will learn how to do this.

“A trader who has never lost, is not a trader yet.” Aristotle.

It’s very important to read and be able to analyze the graphs really well. In the end it is all about recognizing patterns that have occurred in the past and may well be happening in the future again. Remember the Forex market is always on the move.

Technical analysis.
It’s like dating. You’ve got to get to know the other person really well to press the right buttons for him or her. In trading technical analysis of a certain pair is really important. Get to know the pair your trading to predict any movement in the future.
Ask yourself questions as: What is the price at the moment? What was the price? What happened when the price was at this certain level? The answers on these questions will give you a possible outcome in the future. And so a possible right moment to make your trade.
You don’t think this is the only Trading strategy right? Since there are a lot more strategies at use at the Forex market.
For example: Drawing trend lines, support and resistance lines, the candlesticks and the different indicators. Every trader uses its own way to analyze the market.

Fundamental analysis.
Fundamental analysis is also called the old fashion way since it’s used by traders who mainly focus on the economic news.
The idea of trading of the economic news is that the currency will follow the economic news. It is certainly important since it can change the prices but more than often the Forex market reacts in a different way as expected. Take the Brexit as an example. This had a bad influence on the value of the GBP. But that doesn’t have to be the case all the time. You will see that traders who trust on fundamental analysis get confused when it goes the other way.

Swing Trading/Trend Trading.
Swing trading is, the word gives it a way a bit, trading on a swing. Simply, traders are looking for a pair with a predictable big swing ahead.
Swing traders are the hit and run kind of people. They make a trade, get a few percentages profit and close their trade. Most often swing traders are cautious traders. Like a leopard, they wait for the right moment to attack and give it their all when that slightly weak dear is running by.
The swing traders work with the Stop-loss that protects you from big loses. More about Stop-loss later on.

Trading strategy for a trend trader is pretty plain and simple: Make sure you’re there when it happens and stay as long as you can until the trend reveres. Thought of a trend trader is that the price will keep moving in a certain direction otherwise it wouldn’t be a trend right? If the price, unexpectedly moves the other way it’s not a trend and the trend trader gets out of the hot kitchen before he burns his fingers.

These particular trading styles can be very successful if you have the right patience and know where to go for the kill. Mostly you will go for the kill at a retracement point.
-Up Trend: If the trend goes up the Euro is worth more.
-Down Trend: If the trend goes down the Euro will lose in value.
-Sideways Trend: Prices move in a narrow range.

trading strategy

Day trading and Scalping.

A common style of Trading strategy is Day trading. Day Traders are traders who strive to make money on a daily base on the Forex market and make as little as 5 to 10 trades a day.

Day traders who refuse to hold on to their position for one night work with a real tight Stop-loss and hold on to their good positions. For example the EUR/USD pair is the ADHD kid of the class who can’t sit still and is the pair that moves the most. An average of 80 PIPs (More about PIPs in a few moments) a day. So these movements need to be top focus for a day trader.

Scalping is a sort of day trading. Scalpers trade in a relatively short timeframe as five minutes. Every trade they make will be between 5-10 PIPs. Imagine going for a 10km walk. And every 10 meter you find yourself a dollar on the ground. You will finish your walk with a $1,000,- in hand. You see, a lot of small trades will end up being a big one. Scalping is for the thrill seekers under us. It requires constant focus.

Pick the Trading strategy that fits you as a person. If you like to analyze and wait for the right moment don’t go scalping. Other way around. If you are that thrill seeker, don’t go bore yourself with analysis.

Start Scalping!

If you want to know more about Trading strategy, look at the coursebook!