Wednesday, July 30, 2014

Best Forex Scalping Indicators Revealed

June 30, 2010 by  
Filed under Fx Indicator


Scalping the forex market has become a popular way of trading among traders. This is because it allows the trader to take profit fast by getting out of the market within minutes. Due to the short term trading involved, the entry and exit of your trading position can make a big difference. In order to be able to conduct effective scalping, you need the help of several forex scalping indicators that can help you create an edge over the market.

In this post, I will be sharing with you several forex scalping indicators that I use during my own scalping trade. These indicators perform different task to ensure you have a better winning probability. Do note that using these indicators does not 100% guarantee that you will make profit as trading is a game of probability.

Below are the forex scalping indicators to use

1) Parabolic SAR Indicator: The PSAR is a tool that can give you an entry or exit signal. What you need to look for is for the PSAR to flip to the side in your favour before you can enter a trade.

As for exit, you should exit your trade whenever you see the PSAR flipping to the side that is against your position.

BUY Signal

SELL Signal

2) Stochastic Indicator: To improve your trading accuracy, you can make use of the stochastic indicator to help you map out the current situation of the market. There is no point in you entering a long position when the market is already overbought and therefore this indicator can be used to help you prevent such low winning probability trade.

Whenever the stochastic hits the overbought or oversold zone and reverse, the price will usually retrace and this is the best time for you to scalp the movement. With the help of the stochastic, you will be able to know when the retracement is going to occur. For this indicator, you can use the default setting by your platform.

However I did some modification to the Stochastic indicator by adjusting the setting in order to reduce the noise produce by the default setting. This modified Stochastic indicator can help me to avoid some unnecessary losing trades.

3) Pivot Point: There is nothing more important than support and resistance for a scalper. Whenever the price hits a support or resistance, there is a chance for it to be repelled and this is what a scalper is looking for.

Other than those previous highs and lows which can be used as a level of support and resistance, you can make use of the daily pivot point to help you identify major support and resistance. The reason why the pivot point is so powerful is because it is usually used by those commercial traders and thus has more significant than other levels.

Pivot Point Repulsion

When you see the price approaching the pivot levels, you should be ready to take a look at the stochastic and PSAR to look for entry. To find out more about forex scalping system, you can read one of my previous posts that talk about how to scalp the forex market.

The most important thing for a trader is to wait patiently for a confluence of events to occur before pulling the trigger. This can greatly increase your chance of winning and avoid unnecessary losing trade.

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Comments

21 Responses to “Best Forex Scalping Indicators Revealed”
  1. ghazali says:

    Hi Kelvin,

    Do you know any good pivot point indicator? Dont see the indicator in MT4.

    Ghazali

  2. Najam Timuri says:

    I really like the way you explain things, so simple and easy to understand but unfortunately the price you are charging is too much for me in both the options and beyond to my affordability. I feel extremely unfortunate that i will not be able to benefit with your knowledge and expertise.

    regards,
    Timuri

  3. George says:

    Parabolic SAR , I think, is more apropriate for long peacefull trends at 1H chart. The first indicating point apear dellayed and makes me to loose the scalping of first long candle and could throw away me on the reverse . I will test this indicator thoghether whith RVI (Relative Vigor Index) and ADX and I’ll be back whith the results.

    One of the advance of SAR is that shows me the best place where to put the moving SL, better than Fibbos . I sometimes use the moving SL strategy but I never know where is the best place for SL .

    Thank you

  4. Sky Patel says:

    Hi sir

    I have purchased your book about ” how to draw trend lines”. I learnt a good deal of knowledge.Did u published any such good book ? Pl let me know with what
    content it has.
    Thanks

    Sky Patel

    • Kelvin says:

      Hi Sky

      I am glad that you find the book useful. The trend line strategy is one that I personally trade with and you should practice it in order to be able to trade it profitably.

  5. Jackob says:

    Hey Kelvin . i was wondering if you read this message , your last activity on this section was about 1 year ago !!!! by the way
    im a forex trader . 5 years trading asset and it was awesome but for some personal reason i lost my everything and im not gonna get back to that type of trading…. I knew how to scalp but after 5 years : it has all gone.
    i want to know if you are really trading with this strategy and give me some portfolio , a/c history or everything brings me up ! my whole life depends one this step ! im goin’ to get married with no money in pocket or any wealth to count on ! i just need help !

    • Kelvin says:

      Hi Jackob

      What do you mean by you know how to scalp but it is all gone?

      I do scalp sometime but most of the time I am trading the trend.

  6. fahmie says:

    is that Parabolic SAR tell us about the correct trend line sir? Do we need to draw the trend line?

  7. Kyle says:

    Great info, I really like this site. One questions though, When scalping is it best to only scalp in the direction of the 30 min trend. a few times the PSAR Stochastic and MACD have lined up in the direction opposite the trend. Should I still be taking advantage these opportunities.

    • Kelvin says:

      Hi Kyle

      There is no best time frame to trade as it really depends on your preference. Personally for me, I use the trend on the hourly chart instead of the 30 minutes chart but that does not mean that the 30 minutes chart don’t work. I am glad that you are scalping in the direction of the trend as it will often produce more profit than scalping against the trend.

      As for the indicators alignment, I usually wait for the confluence of these indicators before I pull the trigger. Although there are times where I will miss out on profitable trade, it also helps me to reduce the losses that I may incurred. The reason why I always wait for all the indicators to align before I enter the trade is to increase my winning probability and this is always what I recommend to most traders.

      I hope that I have answered your question. Hope to hear from you again. Good luck!

  8. konst says:

    hi,i’m new to forex & i want to sucessfully scalp. in your posts i read these indicators but u did not put the relevant parameters. could u share? Thanks

    • Kelvin says:

      Hi Konst

      All the parameters that I use are default settings, below are the parameters

      PSAR
      Step 0.02
      Max 0.2

      Stochastic Indicator
      %K periods 5
      %D slowing periods 3
      %D periods 3

      Pivot Points
      I usually use the daily pivot

  9. Carl & Warren says:

    What chart do you use this on? The PSAR appears differently on the 1min, 5min, 15min, 30min and hourly charts

    Thank You Warren and Carl.

    • Kelvin says:

      Hi Carl and Warren

      I understand that the PSAR appears differently on different time frames, therefore you should only be concerned about the time frame you are using to enter a trade. If you are using the 1 minute to enter your trade, you do not have to worry about the PSAR on the other time frames.

  10. Joe Pryor says:

    Kelvin, Thanks for the info and may I watch you trade in a video? Just to see how you trade and actually watch the indicators.

    Thanks very much. I am very excited to trade full time and working very hard at it.

    Best regards, Joe Pryor

    • Kelvin says:

      Hi Joe

      I will be tooling up some video courses so that all of you can see how I trade. However I am currently busy with writing a book on forex trend line strategy that will be out for sale hopefully by early August, I will try my best to get the videos done asap.

  11. Munir says:

    Thank you very much for this indicator help. But you didn’t specified about the time frame of the chart and parameters of the relative indicator. Please provide complete information.

    • Kelvin says:

      Hi Munir

      The indicators stated in the post are applicable to all time frame, therefore I did not specific the time frame I am using. However as you are scalping the market, you are likely to be trading with lower time frame like the 5 minutes and 1 minute.

    • Kelvin says:

      Hi Munir

      All the indicator settings are default setting and the time frame for scalping are all done on a 5 minutes chart. Sorry for the confusion.

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