You can make a profit using this trading method through numerous relatively short transactions. The positions may last from a few minutes (the scalping strategy) up to several hours (intraday trading). Consequently, you should pick relevant timeframes for work (from the minute to hourly charts). Despite the short duration of the transaction, the intraday trader must rely on the presence of a trend and trade paying attention to possible retracements and price pullbacks.
Before reading the article and writing your questions in comments section, I recommend to watch this video. It’s not long, but covers biggest part of questions on the topic.
The best short-term Forex strategies
- The scalping strategy for the euro-dollar currency pair is an extra-short-term strategy that is very popular among the budding traders due to simplicity of the rules. It is used at the minute charts during the London Trading Session and requires the signals from the indicators. You should test the parameters on the historical quotes beforehand.
- The strategy based on the Moving Average and Stochastic indicators. It is formed on two price charts with different timeframes, which are the fifteen-minute and one-hour timeframes. The strategy algorithm searches for the best moment for entry confirmed by two charts. The indicator parameters should be set for each trading tool separately.
- The strategy based on the Renco charts and standard indicators. It may be applied to the high volatile currency pairs on the five-minute timeframes.
- The strategy based on MACD divergence applies the divergence between the price chart and the indicator’s histogram. It may be used cross-functionally for any trading tool and on any timeframe.
It is worth saying that regardless of the analysis methods, any Forex short-term strategy requires strict adherence to the management rules in order to minimize possible risks.