Binary options scalping strategy is a method of trading which involves placing multiple orders to catch short-term price movements of the order of a few pips. The trader does not account for global trends. Binary options scalping strategy is designed to last for a few seconds, the maximum is a few minutes. Scalping strategy involves aggressive speculative trading.
There are a number of rules that a trader should keep in mind when trading with options scalping strategy:
– Do not enter into transactions during economic news periods;
– It is a good idea to be less active on the market for these assets on the first and last day of the month;
– Avoid trading on Mondays and Fridays of the week;
– Choose financial instruments with caution;
– When using oscillators, it is advised to refrain from trading in strong trends;
– Volatility indicators should be used to ward off the flat patterns that occur outside the chosen strategy;
– Losses on a single trade should not exceed 5%;
– Do not deviate from your plan;
– Wait for the signal candle to close, regardless of the strategy.
Profit margins range up to 85% of 1 pip purchased. In addition, it is worth noting that a minute in binary options scalping strategy equals a 1 hour period on assets that are designed for long term trading.
Binary options scalping strategy
Beginner traders, who try scalping strategy, often wonder how they can predict the next price movement (up or down) for the next few minutes. It turns out it is quite realistic. Profits can be made from the smallest price movements. Throughout a trading day any given asset will typically make 2 or 3 significant moves in either direction. However, there are plenty of price ripples up and down that allow scalpers to make decent profits.
Knowing this, some not entirely dishonest brokerage companies discourage their clients from making such short-term trades. But options scalping strategy is available at serious and time-proven brokers.
Traders also use forex scalping strategy to increase their profit.
Forex scalping strategy is a short-term scalping trading strategy that attempts to make a profit out of small price movements within the forex market. Scalpers will buy and sell a foreign currency pair, only holding the position for a period of a few seconds or minutes. They then repeat this process throughout the day to gain frequent returns, by taking advantage of price fluctuations.
For beginners, such short-term scalping trading strategy is very useful for acquiring certain skills:
– They get the experience to make quick and skillful decisions in extreme situations often encountered on the financial markets;
– Learning the trading platform and its features to be used with scalping strategy;
– Beginners gain their first profit in a short period of time.
This is very important as binary options scalping strategy can generate up to 80% profit. And it can be had by trading with the shortest expiry time.
Such trading will be profitable if you use a certain balance of computer indicators. When applying this set, it is important to follow a clear logical algorithm of actions.
Here are the basic conditions for the successful application of the binary options scalping strategy:
– The major currency pairs and gold should be the instruments of such trading, as they are highly volatile (this is very important);
– Scalping trading strategy timeframe should be one minute or five;
– Scalping trading strategy should be done during European or US sessions;
– Risk management is important;
– Broker who acts as an intermediary between trader and market should be chosen seriously;
– Time of expiration depends on the current market situation.
It should be added that there are different ways of binary scalping strategy: with or without the use of indicators.
Key indicators for binary options scalping strategy
Three tools are used to analyze the market. You can find the best scalping strategy indicator for yourself.
- The Relative Strength Index (RSI)
It shows the strength and weakness of the price, based on the Source parameter and the Length period. RSI will also show the conditional overbought and oversold levels of the market. It is a very important factor in our trading system. When the price crosses one of these levels, we should watch the market closely.
- The regular Stochastic oscillator
Will analyze the market on our timeframe compared to the previous timeframe. We will see the actual price range and will know what the range was in the past.
- Exponential moving average (EMA)
As price will fluctuate up and down, the best scalping strategy indicator will smooth out the jumps as a solid smooth line. It will also help us see if there is a trend and where it is headed.
These are standard indicators, which are available at almost any broker.
Forex scalping strategy signals
Software or technical indicators generate trading signals in order to be able to identify the entry and exit points for trading in volatile markets. Especially forex scalping strategy signals are important, due to the speed of the trade. In the forex market, both long-term and short-term signal providers target a number of pips to help scalpers spot potential opportunities when the market is particularly volatile, or equally, when it is quiet and there is less liquidity. Forex scalping signals are based on economic events, such as the ones we have discussed above, or forex scalping strategy indicators.
What is the optimum time for scalping?
The timing of your forex scalping strategy session should be chosen with the following criteria in mind:
1. News releases. A favorable time is when there are no news releases containing the forex calendar.
2. The choice of currency pair (you need a pair, which does not belong to the working session).
3. Dynamics of a trend on the time interval in the previous periods.
The probability of getting a profit is higher during the daytime than in the evening hours (19:00 – 23:49), though there are some exceptions to the rules. During lunch hours (12-16) trading activity decreases. The highest activity is observed in periods from 16:00 to 18:45, from 10:00 to 12:00.
Strengths and weaknesses of forex and options scalping strategy
|Strengths of binary options and forex scalping strategy||Weaknesses of binary options and forex scalping strategy|
|The possibility of a large income||High risks|
|Ability to trade in low volatility and calm market||The need to be constantly present at the monitor and monitor the timetable|
|There is no need to wait, there is always an opportunity to work, whereas other strategies involve having to wait up to 80% of the time||Great stress during the process, because you have to make quick decisions and constantly have to open new positions|
|The possibility to trade with a small deposit||Not all brokers allow scalping. Often the prohibitive measure is the high spread, which makes profits from scalping almost unattainable|
|There is no complicated analysis. Loss trades are compensated by profitable ones, even with a large number of first trades|
In general, scalping trading strategy is the choice of the very active and aggressive trader. The opportunity to get a large return during one trading session will often be compensated by the fact that on some days the profit will be negative.
Many disadvantages of this simple scalping trading strategy can be avoided by using automated trading. However the high risk will still remain.