Scalping System

Forex Scalping System Revealed

December 24, 2009 by Kelvin
Filed under Forex Tutorial

15 Comments

Forex scalping has become more and more popular among new traders. This is because forex scalping tactics allows the trader to see fast profit sometime within less than 20 minutes of trading and this is what entices some traders.

Although scalping the forex market can see quick profit, it can also amount to quick loss if you do not execute it with proper analysis. Due to the scalping nature of your trade as a scalper, you can enter several trades within 1 hour and it can amount to a sizeable loss if you have consecutive loss trades.

Here are the forex scalping analysis you can do:

1) Mark out the important support and resistance levels, typical support and resistance levels are

• Fibonacci 0.618, 0.5. 0.328
• Pivot Point S3, S2, S1, PP, R1, R2, R3
• Previous high will be your current resistance and previous low will be your current support.

2) Use oscillating indicators like stochastic or RSI or even MACD can help you to time your entry more accurately.

• If you are looking to SELL, you should try your best to wait for the oscillating indicator to go overbought and start to curve down.
• If you are looking for BUY, you should try your best to wait for the oscillating indicator to go oversold and start to curve up.

Besides timing your entry, these oscillating indicators can also help you to time your exit.

• If you go SHORT, you should be looking to exit your trade when the oscillating indicator reaches the oversold zone.
• If you go LONG, you should be looking to exit your trade when the oscillating indicator reaches the overbought zone.

3) Confluence of Events – In trading, we should also wait for confluence of events to happen before we enter or exit a trade. Confluence of events refers to the situation where two or more conditions to enter a trade or exit a trade happen together. This can gives you more confident and assurance in the trade.

• The best long entry point is when the price hits the support level with the oscillating indicator reaching the oversold zone and start to curve up.

• The best short entry point is when the price hits the resistance level with the oscillating indicator reaching the overbought zone and start to curve down.

Above are the forex scalping system I have been using. Although some of you may be thinking that it is a simple strategy and may even wonder if it can make you money, you need to know that the most profitable strategy are those that are easy and simple to execute.

I do not encourage you to start trading this strategy immediately and I actually hope that you have the habit to try out new strategy on DEMO account and master the way to execute it before trading LIVE with it.

Fibonacci Trading

1.Set up Stochastic ( Nak tau Market dah Over sold atau Over Bought)

2.Set up MACD ( nak tau bila ENTER)

April 13, 2010 by Kelvin
Filed under Forex Tutorial

25 Comments

If you have read my previous post showing you how to plot the forex Fibonacci indicator on your chart, you will understand the power of the 0.382, 0.500 and the 0.618 Fibonacci retracement level. These retracement levels are areas where you will the price being repelled by them. What makes Fibonacci trading such a popular system is because of its ability to predict the subsequent movement of the price which is through its extension.

Here is how the extension works:

1) When you see the price retracing to the 0.618 level and then being repelled by it, there is a high chance that the price will extend itself to the 1.618 level.

2) When you see the price retracing itself to the 0.500 level and then being repelled by it, there is a high probability that you will see the price extends to the 1.500 level or even 1.618.

3) If you see the price retracing itself to the 0.382 level and then repelled by it, you will most probably see the price extend itself to the 1.272 level and then move to the 1.382 level.

With your understanding of the extension, you will now be able to understand how this forex Fibonacci trading system works.

First of all, you need to setup either the Stochastic or RSI to help to identify whether the market is oversold or overbought.

Next, you need to setup a MACD indicator to help you identify the right time for entry.

Once you got this 2 indicators setup, you will need to draw Fibonacci whenever you see a swing high and a swing low. All you need to do is to wait for the price to retrace back to either one of the 3 levels and then check your indicators for signal. If the price did not retrace but continue to move higher or lower, you just have to remove your Fibonacci and then redraw them again with the new swing highs or swing lows.

Whenever you see the price retracing near a level, you should check your indicators for the following

1) If you are in an uptrend and you see the price retracing back to the 0.500 level, you should check your Stochastic indicator to see if the market is oversold or not. If it is indeed oversold, you should then move on to see your MACD indicator and wait for the histogram to flip over to the upside again before you enter your trade.

After you have entered a trade, your exit strategy is equally important. You will usually exit your trade 10 pips before the expected extension and you should always place a stop loss around 20 to 30 pips below the level of retracement.

Fibonacci Trading Example 1

2) If you are in a downtrend, the conditions that are stated above shall be reversed.

Fibonacci Trading Example 2

If your Fibonacci retracement levels coincide with a major support or resistance level, this will give you more strength in that level and thus increase your chance of winning.

Do not start to trade immediately with this forex Fibonacci strategy. You should always try any new strategy out on your demo account and then move it to live only when you are able to trade profitable with it consistently.

I have received emails from readers of this blog asking me for recommendation of good courses on Fibonacci, in fact I have purchased one course that teaches Fibonacci strategy before and find it pretty useful for my trading. You can find out more about the course from the link below

Forex Support and Resistance Indicator (Pivot Point/Fibonacci/Bollinger)

Forex Support and Resistance Indicator Explained

August 22, 2010 by Kelvin
Filed under Forex Indicator

4 Comments

Knowing the major support and resistance levels is very important in forex trading and the best way to do this is through the use of several forex support and resistance indicators.

Most of you have heard of major swing points as support and resistance and do not know anything about indicators that can provide you with the same information. Therefore in this article, I will be sharing with you some of the best forex support and resistance indicators that I have used and proven to be pretty powerful.

1) Fibonacci Indicator – I guess most of you have heard of Fibonacci indicator, it is a powerful tool that is able to help you predict where the market might retrace to and then revert back to its original trend.

The Fibonacci is made up of retracement and extension, the important retracement support and resistance levels are 0.382, 0.500 and 0.618 and you will usually find the market respecting them. As the forex market is moving in waves of retracement and extension, you can then make use of these levels to help you to enter a trade in the direction of the trend.

Fibonacci Support and Resistance

Another powerful feature of the Fibonacci is its ability to predict the likely extension and this information can be used to help you in your exit.

2) Forex Pivot Point – The pivot point is a tool that is commonly used by those big dog traders and thus it is a very reliable support and resistance level. Try plotting pivot point on your chart and you will see how many times the market get repelled by it or how many times the market move tremendously after breaking through it.

Pivot Point Support and Resistance

Personally, I always plot a daily point point on my 15 minutes charts. In fact, you can plot an hourly pivot or even weekly pivot depending on your preference. I often use the pivot points as entry and exit targets in my trading and you can also do the same thing.

3) Bollinger Bands Indicator – Other than the above 2 indicators, you can also make use of the Bollinger bands upper and lower bands as support and resistance. Similarly, you will find the market respecting the bands as they are often repelled by it.

Bollinger Bands Support and Resistance

There are some traders who have trading plan that simply trade the repulsion of the bands. This is especially effective when you are in a range. When you are in a ranging market, the price will always fluctuate up and down. When you see the price hitting the upper band, you can enter a SHORT trade (SELL) to profit from the repulsion. Similarly, you can enter a LONG trade (BUY) when you see the price hitting the lower bands.

The above are 3 effective forex support and resistance indicators that you should use in your trading as they are able to help you in your entry and exit. However you have to try each of them out on your demo account before you plunge into live account. Spend sometime to practice with them and make sure that they are able to fit into your trading plan.