Scalping trades are much like action movies which keep traders on the edge of their seats. These trades are quite exhilarating and mind rattling and require traders to stare at their charts for long hours. The main idea of scalping is to acquire small sum of pips (as much as possible) during the busiest trading sessions. There are countless numbers of strategies which traders can make use of for securing profits. However, among all of them, one which is put to use in preponderance is the Bollinger bands Forex scalping strategy.
Bollinger bands Forex scalping strategy is primarily used for gauging short term market turbulence. The most crucial part of this popular scalping strategy is its low pip spread and easy to use nature.
This system is also very versatile and functions well in most topsy turvy market scenarios.
Preferred time frames which most traders employ are 1-minute, 5 minute (most used) and 15 minute.
Suggestive FX sessions include Tokyo, New York and London.
A Look into Its Most Widespread Strategy:
The 5 minute Bollinger Band Forex scalping strategy stands as its most effective one, as per notable FX forums.
Setting up the strategy –
Trading sessions will be London Session or American Session.
Popular currency pairs to go for are GBP USD and EUR USD.
Time frame will obviously be 5 minute.
What Are Its Buying Scenarios?
When using Bollinger Band Forex scalping strategy, one needs to see if the price is declining or not. In most cases, the chart will represent a flat or stable market range. Its Buy point comes about when the currency price dips below and comes in contact with the Bollinger Band.
As for its Stop Loss, traders will need to set it at 10 pips underneath the Entry price. As the currency price (be it GBPUSD or EURUSD) moves upwards and reaches the upper Bollinger Band, that is the point where one should take the profits.
What Will Be Its Selling Situations?
To determine the Sell point, one just needs to look at the scenario in its mirror version. If one finds the price of GBPUSD or EURUSD rising and touching the Bollinger Band, that is the point to open a Sell Position.
Stop Loss setting should be done 10 pips over the Entry Price and as the currency price declines the lower Bollinger Band point, simply take the profits.
Testing It Out Via Demo Account:
For those having an interest in this scalping strategy, the great thing is that it is responsive to MetaTrader 4 terminal. Not only will one be able to work with it under real market situation but also will be able to check its impeccability through backtesting the strategy. Some experts also suggest mating this strategy with the RSI – Relative Strength Index for more clarity in data interpretation.
Do try out this Bollinger Bands Forex Scalping strategy before-hand. Being familiar with it will eventually make things easier when the time comes for real money Forexing.
Wish all Luck!
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