It is almost impossible for anyone involved in currency trading to not have heard or come in contact with Forex scalping indicators. Scalping refers to the system initiated by traders to create profits on little price changes. Minute fluctuations in price can adversely hamper a Forex scalping strategy.
When scalping, positions are initiated and exited within a short time duration, which can be within minutes. A scalping indicator does not entirely take away the human factor in trading, as you still have to carry out your trading duties. However, the best indicators are designed to help traders make sense off price movements.
Finding the best indicator for scalping can be difficult, but this article will offer you a head start. The moving average is first on my list of a scalping indicator and can be formulated to yield a simple scalping strategy. This is achieved via the combination of the Simple Moving Average on the 1-minute chart in a bid to gauge powerful trends. This simple strategy born out of a the simple moving average is quite easy to grasp.
The lines of the moving averages will stack up, pointing either above or below. Powerful trends have price stuck to either 5 or 7-bar Simple Moving Averages. Diminishing strength is depicted when price penetrates the bar Simple Moving Average, an indication of a range bound market or a reversal signal. Smaller space between the lines when the ribbons are somewhat above price bars represents a sell signal, while more space among the lines when the ribbons are aligned somewhat below price bars is a signal to buy.
The Parabolic SAR satisfies our condition of a scalping indicator. An uptrend is in place when price stops declining and reverses above the SAR, while a downtrend is said to occur when price ceases to rise and reverse below the SAR.
The SAR continues to safeguard profits since it does not rise or fall in a sell or buy condition respectively. Scalpers cannot entirely rely on real-time analysis of the market to get buy and sell alerts that they require to lock several minute profits in a usual trading day. The good news is that they can use modern tools which are tailored to small time frames for this purpose. You must be logged in to post a comment. Contact Us Search Login. By Market Traders Institute.
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