Forex scalping can be very exciting and profitable, as long as you are approaching it correctly. Because the scalping methods Forex always sound simple in theory, they attract a lot of new traders. However, to become a successful scalper you should first get to a certain level of knowledge and expertise. Let’s start this process by figuring out what is the best time frame for Forex scalping strategies?
What is a Time Frame in Forex
For starters, what is a time frame? As you have probably guessed from the name, it is a limited period of time in which something happens. In the case of Forex trading, time frames are the chart settings that express price movement. The charts are used to analyze the market, build forecasts, and find the most optimal trading set-ups.
The time frame trading varies from one trader to another since everyone has their own strategy and style. Logically, the chart will look slightly different in each frame and present its own unique opportunities. The long time term frames are ideal for swing traders, position traders, or anyone else who is looking to build a forward-looking action plan.
And any short time frame is great for focusing on narrow, specific parts of the chart and making more scaled-down trades. Small-time frames are very popular among all types of day traders, and especially the scalpers.
What is Scalping Trading Strategy
Forex scalping strategies are both the most exciting and the most complex trading approaches. The goal of every scalper is to benefit from the minor fluctuations on the chart, sometimes as low as several pips. After achieving several dozens of such small victories, the traders are then able to gather a pretty visible profit.
While trading in small portions and quickly closing every new trade sound simple in theory, the best scalper strategy techniques actually require advanced levels of skill and experience. And the main reason to ease your way into scalping, rather than diving headfirst on your very first day at the market, is volatility.
Increased volatility is bread and butter of pretty much any short-term trader, however, it can also be quite dangerous. While the chart can quickly jump into the desirable direction, it might as well leap in the opposite one. This means that scalpers and other volatility-dependent traders have to have a quick reaction and great abilities to make critical decisions on-the-spot.
Of course, skill comes with practice, and anyone can effectively master Forex scalping if they put their mind to it. The first step to comprehending the scalping approach is by figuring out the best time frame for Forex scalping method.
1 Min Scalping Strategy
The Forex trading 1 minute time frame strategy is perhaps the most popular scalping approach. Due to the limited amount of opportunities, the trader can focus on looking for one specific signal, which is a great asset for anyone with short attention spans. However, despite the breezy ‘one-minute’ name, this strategy will actually require at least two to three hours of your time daily.
The very first thing to establish for yourself is: how many pips should I look for in 1 minute time frame. And the rule-of-thumb answer is usually 3. However, if you clearly see that you can achieve a higher profit without risking too much, or, on the contrary, the absolute ceiling of the current set up is 2 pips — act accordingly.
There are several conditions for the successful implementation of the 1 minute scalping Forex method. First, it’s best to start trading during the most volatile sessions: New York or London. Next, although all currency pairs are more or less suitable for scalping, going with majors will always benefit you more.
The popular indicators for the 1 min scalping strategy are the EMAs (Exponential Moving Averages), 50 and 100, and the Stochastic Oscillator with periods 5, 3, and 3. By observing the way the averages interact with each other and confirming their signals with the Stochastic’s reading a trader can ultimately have the exact solutions for both long and short positions.
5 Min Scalping Strategy
The 5-minute scalping strategy is somewhat similar to the 1 min scalping Forex method, with the major difference being the time frame. Same as the one-minute approach, the 5 min scalping strategy focuses on capturing momentum.
The indicators that go along with the five-minute chart are the 20-period Exponential Moving Average and the Moving Average Convergence Divergence (MACD) at the default setting (12, 26, 9).
Stop losses and trailing stops are highly advised for the five-minute scalping strategy, as they do a great job at cutting down losses during the aggressive market conditions. The common pip goals in this strategy are 10-15.
15-minute Time Frame
Some day traders might argue that the best time frame for Forex scalping 15M. However, due to the expansive amount of info, fifteen-minute approaches might require higher levels of expertise.
While the Forex 15 min scalping strategy can be beneficial for a broad number of traders, it is best to perfect your short-term trading skills on smaller charts, with fewer data to confuse you. But, with that said, the 15-minute chart is still a great tool to zoom out and judge the overall situation of your open positions from a different perspective.
30-minute Time Frame
The 30-minute charts in scalping are also a great ‘step back’ instrument. As you plan the positions on the 1 or 5-minute charts, you can take a general look from further away to get the grasp of the blogger picture.
While the large trend waves rarely affect scalpers, noticing a large-scale pattern or tendency can help you to decide on the overall direction of the upcoming trades. This way, even the fast-paced, grab-and-run scalping can serve as a forward-looking, solid trading approach.
At the end of the day, scalping is a wonderful style, but it’s not for everyone. So, before you jump into one of the above strategies, make sure it fits your personal preferences and expectations. After all, there are hundreds of other strategies out there, one of which will be a perfect fit.