Scalping Forex

M

mrbud

Guys,

I day trade, mostly scalp the YM and ES. I heard so much about Forex, I figured I could get a little night action going, as I'm a night owl.

I'm on east coast time. At 8:00pm I've been watching the Yen open, and Midnight, the Euro. No way does it move like the ES or YM. I came to the conclusion it's not for scalping, but for longer term, even swing trading.

I heard so much about Forex, I was disappointed.

Am I missing something? I was looking for some scalping vehicles for night trading. Something that mirrors the ES, or YM in volume, volatiity etc -that trades at night, east coast time.
 
what the about the Fdax ? It starts at 2am and gets really interesting from 3am. I didn't find anything convincing for the evening time.
 
Hang Seng Futures they open 11:15am Tokyo time (futures trade in HK)

Quote from mrbud:

Guys,

I day trade, mostly scalp the YM and ES. I heard so much about Forex, I figured I could get a little night action going, as I'm a night owl.

I'm on east coast time. At 8:00pm I've been watching the Yen open, and Midnight, the Euro. No way does it move like the ES or YM. I came to the conclusion it's not for scalping, but for longer term, even swing trading.

I heard so much about Forex, I was disappointed.

Am I missing something? I was looking for some scalping vehicles for night trading. Something that mirrors the ES, or YM in volume, volatiity etc -that trades at night, east coast time.
More...
 
Don't expect much action around midnight EST. The real action starts around 2:00am when London opens and continues through the NY session.

Not sure what you saw and/or define as scalping opportunities but I scalp the EUR from around 6am until about 11am and there are plenty of opps available every single day.
 
Bugscoe, may u elaborate how you scalp or daytrade the Euro. I personally have found it difficult or like close to impossible to find a successful scapling stratedgy that works on the forex. The risk reward ratio is not feasable by any means. This due to the sudden jerk and whip saw movements of the market that happen almost constantly. You need to risk a minimum of 20 pips I find to accomodate the jerk motions -- the rewared for scapling would be 3 - 5 pips --maybe 10 if you are lucky. This is a loosing stratedgy -- you need to be succesful 4 - 7 times -- for one wrong trade just to break even. You may have a string of good trades -- then you get that one which takes away all of your profits. Seems to happen all the time to me --hence I also came to the conclusion that forex is not menat to be scalped or day traded. Would you care to comment?
 
Would definitely do it via CME futures. If you go spot then use IB or a direct access place. I guess OANDA would work as well but it's so much more beneficial to not have to fight the spread.

Look at EURJPY and GBPJPY for your desired time of trading. But GBPJPY can be a real wild ride.

Euro futures have opportunities a plenty.

The poster who mentioned trading during London time is absolutely right.

Just be aware that currencies have different "gyrations" than the US Indices. This is coming from an FX guy who is getting back into US Index Futures.
 
Most forex scalpers trade gby/jpy.

Many days from 7pm est. on there's some good movement but the best is after the London open at 3am. est.
 
Quote from pbw:

Bugscoe, may u elaborate how you scalp or daytrade the Euro. I personally have found it difficult or like close to impossible to find a successful scapling stratedgy that works on the forex. The risk reward ratio is not feasable by any means. This due to the sudden jerk and whip saw movements of the market that happen almost constantly. You need to risk a minimum of 20 pips I find to accomodate the jerk motions -- the rewared for scapling would be 3 - 5 pips --maybe 10 if you are lucky. This is a loosing stratedgy -- you need to be succesful 4 - 7 times -- for one wrong trade just to break even. You may have a string of good trades -- then you get that one which takes away all of your profits. Seems to happen all the time to me --hence I also came to the conclusion that forex is not menat to be scalped or day traded. Would you care to comment?
More...

I do it by paying close attention to price swings using fibs, sup/res levels and trend lines. I use tick charts with an eye on the 2min, 5min & 15min charts for levels.

I usually book profits at about 2-5 pips if price happens to stall, either at a key fib level or some other significant level. Sometimes you get in on a good thrust of momentum and score 10+ pips. I find with the EUR, you can catch many 2-5+ pip moves everyday.

There are no "if this, then that" type of rules. It's basically trading with more of a "feel" for the pulse or heartbeat if you will, of the swings.

As far as 20 pip stops - I have a hard stop on every trade of 20 pips, but that is only for the catastrophic event - broker platform goes down, lose internet or power, etc. Other than that I will close most trades that go against me by 2-4 pips. When I enter, I'm pretty certain on the direction so I don't need much to convince me that I'm wrong.

For me, the key to scalping is using some creative MM. Which means generally using lot sizes that aren't you're maximum based on your capital. This is allows me "wiggle" room to recoup a loss or losses once I'm sure of direction. For instance, if I take a trade with 3 standard lots and take a 3 pip loss and price breaks the other way, I'll get back in with 6 or 9 lots. That way if I catch 3 pips I've not only recouped the loss but made a profit as well. This isn't to say I'm stopping and reversing every trade, it's just how I utilize MM.
 
I dont understand why you are disappointed. Now that the vola is back, IMO its really great for shortterm traders. The majors do >100 pips range a day on a regular basis(and often much more), spread is 1 most of the time, transaction costs < 0.5 pips for the roundtrip. There is plenty of opportunity and low trading costs. I was starting to look at other markets earlier this year (low vola), but at the moment its fine.

If you are coming from indices, you could take a look at usd/jpy. Its somewhat correlated to equities due to the carry trade (at times very strongly, altho probably not on a scalping scale). Maybe you get a better start in this pair.
 
When I said disappointed, I had figured that the volume, and movement at their open{Yen, Euro} would resemble our 9:30am open. We hear so much about Forex, how it's the biggest market, most volume etc, I sat down and assumed the time/sales tape would be flying up and down like ES/YM.


I have the regular Forex charts, as well as the CME currency future charts. I was hoping to get the same type of time/sale action from the tape on the currency futures.

I watched a few of the openings 8:00pm, 1200am etc, and was surprised. For a while I thought that my charting symbols were off. From some of the posts here, I guess many are scalping Forex successfully. Maybe I'll just have to adapt and use a different approach.

I'll check out some of the suggestions on here. I appreciate everyone's response.

I hear the Nikkei 225 mini is gaining in popularity. It starts at 8:00pm Eastern, right up my alley. I'll have to stick a chart up and watch it trade. Don't know if I can get the mini on Esignal though.

Thanks everyone.
 
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