Forex Simple Strategy for Scalping

One of the most difficult for scalpers before trade is to determine a strategy. There is a complex trading strategies and there are simple, and make plans for entry with a specific strategy for the scalper does not have to be complex. This article exemplifies a simple trading strategy for scalping with the indicator CCI (Commodity Channel Index) for scalping. Only three steps you need to do is determine the direction of the trend, decisive momentum with indicators CCI entry and exit levels determine in accordance with risk management.

Determine the direction of the trend

First at all, to trade using simple strategy for scalping. Scalper typically use a time frame of 1 minute to 15 minutes. To determine the direction of the trend are commonly used indicator of exponential moving average (EMA). In the example NZD/USD following used EMA period 200. If the price moves above the curve line EMA-200 then assumed moderate bullish trend and momentum trader will wait for an opportunity to buy, otherwise if the price moves below the EMA-200, traders await sell opportunities.

From the picture above looks prices are still trending strongly indicated by the distance between the closing price of the EMA-200 widening. Besides price movements also form a higher high levels (a new high level higher than the previous high level) and higher low (low levels of new, higher than the previous low level) which is characteristic of an uptrend movement.

Entry moment with the indicator CCI

Because trading with a low time frame, then after knowing the direction of the trend trader should immediately determine the momentum of entry before momentum is lost and the trend changed. One indicator that could help determine the momentum of entry is CCI. Besides being used to determine overbought and oversold situation, the CCI indicator also shows the cycle of price movements or moments of change of direction of the trend, ie when there is a divergence between the direction of price movement and direction of movement of the indicator.

Because in this example the movement of the price uptrend, the trader will wait for the oversold state for the entry, when the CCI is below -100 level as shown in the image above. In contrast to a sell entry made only when the price moves below the curve line indicator EMA-200 and CCI indicator shows overbought situation.

Exit level in accordance with the risk management

Risk management is crucial in scalping because traders will usually entry several times a day. Trader can use extreme levels (high or low) before a stop loss level, or by specifying a stop loss levels on the curve line itself. Risk / reward ratio should not be higher, but try to be greater than 1: 1.

That's all, this is a simple trading strategy for scalping.