How do I pick a currency pair from the four Majors for scalping? I was involved in Forex about three years ago, as the technical partner code EAs, don't understand much about Forex itself. Lost a bunch of money, learned a lot of lessons. Distinct from my previous experience, I'm now looking for lower-risk, slower gains that will compound over time -- hence scalping.
Since most places including BabyPips recommend trading on one of the Majors for scalping, how on earth do I decide which of them to pick? I would like to stick to just one pair to start. Sticking with just one pair is the best idea. Don't go for the cross currency pairs as their spreads are killing for the scalpers.
It has the lowest spread. It's the most volatile major currency pair. Volatility is measured in average candle size number of pips, say. If I'm scalping, I will likely set TP targets of pips; even with ridiculous spreads during news releases? Whether the movement is 5 pips, or 50 pips, or pips, I will still set a TP of pips and exit. I'm assuming no more than one trade per candle. This is mainly due to the low spread. One of the guys I work with scalps very effectively on these pairs.
You can check out how he does it through his myfxbook. Also you may work with a broker who offers spread less than 2 pips and no commission. The major reason is it's lowest spread which helps scalpers to trade for a short time seconds to minutes without paying too much spreads again and again. Why would I want a volatile currency pair? So how does volatility help me scalp? If you're only grabbing pips you can't afford to be paying 2 pips on a spread.More...