Forex scalping requires a completely different mindset to other forms of day trading. Those who engage in Forex scalping normally make a number of trades a day taking somewhere between 5 to 10 pips from the market each time in many cases. Of course, the more trades that are made, the higher probability the scalper will have losses.
Hence the need to exercise discipline and not shoot at everything that moves. Look for only high probability trades. This however is easier said than done. That is why the following piece of information is critical in understanding market behavior from a Forex scalping point of view.
A Crucial Piece Of Information
The crucial piece of information we are referring to is this:
Somewhere between 60 - 80% of the time, the market is in consolidation.
This means that most of the time, the market is not making significant moves. It tends to range in a consolidation channel for hours at times before another significant move takes price to another level.
This market behavior pattern is ideal for Forex scalping once the trader fully understands it.
Develop Recognition Skills
Whenever the trader opens a chart, key support and resistance levels need to be identified. Previous highs and lows should jump out at the trader and be quickly recognized and identified.
To this end it helps to draw horizontal lines on the charting software to mark the top of a channel and the bottom of a channel on whichever time frame the trader is using.
Hence the need to exercise discipline and not shoot at everything that moves. Look for only high probability trades. This however is easier said than done. That is why the following piece of information is critical in understanding market behavior from a Forex scalping point of view.
A Crucial Piece Of Information
The crucial piece of information we are referring to is this:
Somewhere between 60 - 80% of the time, the market is in consolidation.
This means that most of the time, the market is not making significant moves. It tends to range in a consolidation channel for hours at times before another significant move takes price to another level.
This market behavior pattern is ideal for Forex scalping once the trader fully understands it.
Develop Recognition Skills
Whenever the trader opens a chart, key support and resistance levels need to be identified. Previous highs and lows should jump out at the trader and be quickly recognized and identified.
To this end it helps to draw horizontal lines on the charting software to mark the top of a channel and the bottom of a channel on whichever time frame the trader is using.
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