How Would You Classify 1 - 5 minutes trading

Hi auxtov,

There are two opposing opinions about Forex time frames profitability. Some traders say that scalping is the only sure thing that can bring you fortune in Forex.
Others state that only long term trading (daily charts and up) can take you to your goals, while trading noisy randomly moving prices on small time frames will wipe out your account sooner or later.

Well, from my own trading experience, I finally switched to 5 minutes... I feel safer there. I come when I want and trade what I see here and now. I don't place hopes for the future, which you must do if you want to trade higher time frames and leave your trade open for hours or days. So, to me scalping is sure acceptable way to trade Forex.

Alex

Thanks Alex, What are the best tools for 5minutes trades? and what are the best settings for my RSI, SCHOCASTICS, AND MOVING AVERAGES. that would really capture the market trend for the 5 minutes lots. Is there a limit to how many 5minutes trade I can execute in a day? And what is the cost of such trades to me. Last friday, i amassed over 150 pips using my demo. I really for once was in grasp of my trade and it was less tasking and trends were easy to catch. please you should come up with a lesson on 5minutes trading.

There shouldn't be any implications for you.
While scalping the Forex you won't pay or collect interest if you close your position by 5:00 pm EST.

As about spread, everything will depend on the currency you choose. The lowest spread you can usually get with EUR/USD pair - 2 pips, but this pair sometimes is lazy to move enough to make scalpers happy. Looking for more active pair, you may turn to GBP/USD, however the spread cost here will be a bit higher.

For scalpers spreads do make difference between winning and losing a trade. But don't be locked on those thoughts, the art of scalping is about finding the best trading system and the currency that responds the best. I've heard of traders scalping extremely well with GBP/JPY, which by the way has 6-7 pips spread!

Good luck!

I use this scalping method
http://forex-strategies-revealed.com/scalping/5pips-gbpusd

Well, RSI... I don't like this tool :), but you may try standard RSI(14).

For Stochastic settings, just make sure they aren't "looking back" at more than 3-8 price bars, something like Stochastic (5,3,3) should be just fine.

Moving averages are good for identifying a trend. Use them for confirmation purposes only, EMA 20 tells trend direction quite well.

Also talking about EMAs this Forex scalping system is worth attention: http://forex-strategies-revealed.com/scalping/ema-bands

There is absolutely no limit as to how many trades you can execute per day. The cost of each trade for you is going to be the spread cost, that vary from pair to pair from broker to broker.

When you open a new position you have already paid a spread cost and need to cover the negative balance before you can start making money. For example, if a spread cost for EUR/USD is 2 pips, once you open a position you will be -2 pips. You then need to cover those 2 pips to be break even and after that each pip you earn is yours.

Alex

Oh yes, scalping method is acceptable. In fact, there is a big reason to believe that it is also the most profitable method of making money in Forex, because brokers hate scalpers so much that ready to implement delays for filling the orders for a chosen accounts and even ask you to stop scalping or leave...

Hi I'm a newbie as well.Just 3 month demo mini account. I dont like scalping because it needs too much stresses in every minuts.I prefere 15 or 30 minuts.

Hi Everyone,

I really enjoyed these posts. I also scalp from 1 minute to sometimes holding a position up to 10 mins or so. I found the key to scalping is to know the activity times for the pair. For instance, when you pay a 2 pip spread for placing a position and you know the average bar range for 1min is about 5 pips you can be certain that within 1 minute (ie 1 bar) you can make back your money.

The method I use was derived from shares, its a basic strategy of 'channel bouncing' (ie when a near resistance is reached I short, when a support is reached I buy). I found indicators such as MACD, Stochs and RSI work great with this, but they key to the method really is the Trend Lines.

Do you guys use trendlines in your strategies? I found a lot of strategies focus on pure technicals and tools, nothing said about trendlines. In my experience when a price hits a trendline - thas exactly where the techincals start to work.

Would love to hear your views on this,
Thanks,
Nick

Hi Nick,

I use trend lines and think many traders here do. In my opinion, trend lines should be set by default with any method or system. Same for supports and resistances.

That's why I guess we don't see much emphasis on trend line importance here. Also, both trend lines and support/resistance levels are quite subjective, e.g. can be identified differently for same charts, while indicators show the same data for all traders.

Alex