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EURUSD Scapling

  #7 (permalink)

Seattle, WA. USA
Posts: 3 since Sep 2012
Thanks: 3 given, 1 received

mtaalamu View Post
Hello all,

Since I'm fairly new to forex, I'm still trying to figure out which methods to focus my attention.

I've heard that scalping in forex is a bad idea due to the (potentially) large spreads

I trade forex on MB trading because I pay NO commissions and can set my own spreads. Overhead (meaning win percentage, commissions, spreads and slippage) is what makes scalping a bad idea. If you can eliminate or at least minimize those variables, you will do better.

My question is this: what is your opinion of scalping on the EURUSD when using a 30m candle and 10-15 pip targets? The spreads are generally pretty low on that pair... Is this even a viable outlet?

I personally only use 20-60-and 180 "range no gap" bars (available on Big Mike's) because it quiets my charts down compared to time or tick based charts.

Most of the trading on forex IS EURUSD so the market is liquid. I trade on MBTrading (through Ninja Trader 7) and set my own spread, but in general, when I was on currenex, the spreads were fairly low as yeah, I think this is a viable option. It's all I trade.

I've been trading using large targets (40-100 ticks) for almost a year now, and it amazes me how many times my entries will hit somewhere between 10-30 ticks before going against me. It seems logical to lower my targets then, right?

Yes absolutely. Considering that I think 1/10 pip is a win--10 pips to me is nothing short of phenomenal. Personally, if I had the temperament to stay with a trade long enough to take 10 pips, no way would I let it go against me for more than say... half or 5 pips before I'd take my money off the table and wait for another entry.

But really, scalping is not for everybody--it's labor intensive. To scalp profitably you need to be RIGHT most of the time and then you need to be able to cut losers so quickly and dispassionately that it borders on the super human.

Or, you need bigger winners; which is what you have. Why not stay with the big winners and just don't let it go against you once it's turn profitable? I guess the key factor to consider is what is your hit rate or win percentage? The more you win when you are right, the more you can afford to lose when you are wrong--up to a point.

If you are consistently profitable now, I would just keep that going and increase the size of my trades over time... until I reached the point at which my judgement is clouded because the size is too large.

To me, consistency is the only thing that matters ...

Great Post, mtaalamu. I do have a question for clarification please. My Broker is also MBTrading and although I don't have the $ to not have a spread, I certainly have no complaints. I'm also using NinjaTrader so we're kind of on the same page.

You mention you use 20 - 60 - 180 Range bars and I'm wondering if those bars are set up in NT for 1/10 of a pip. (Tools, Options, Data). I also use Range bars and had those type of bars (1/10) until yesterday when their Support helped me change the bars to just Pips so my Range Counter would be correct.

Common sense tells me you're using 1/10 Range bars so just making sure. I'm using 5, 8, 10, 20. Presently experimenting different strategy trading mostly off the 8Range. Previously had to input for 50, 100, 200Range.

TIA Sharon

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