r scalping? I hope that by now you’ve established what scalping means and how it works. If not so then I will offer to tell you the meaning once more. Scalping is a system of trading where Forex traders open and close positions for a short time severally within the day with an aim of making quick profits.
This system of trading requires traders to be skilful and very prompt since it involves swift opening /closing of positions with sole interest of picking the already accumulated profits. The system doesn’t compel traders to stay in the market throughout the day/night in order to make maximum gains. It needs specific and favourable times.
Best times to scalp
Ideally, scalping is favourable during the first hour of the London session that occurs between 8:00AM-9:00AM, UK time. The hour makes it easy to trade because there’s increased volatility that guarantees either the downward or upward trending. When there’s a trend in the market, it’s easy to either make money quickly or lose money swiftly.
Another reason that makes the opening hour of the London session good for scalping is the fact that there can’t be the release of economic data that can sway away the market from where traders want it. The absence of economic data means that a trader will rely on technical analysis or price action while trading. What’s more, the market remains consistent without wavering interferences from external source hence good for trading. The ideal currency pairs for this session is any currency that has EURO or GBP as its base currency.
If you’re unable to trade during the aforementioned session, then you should never worry as you can wait for the New York market to open at 3:00PM, UK time. What makes the time favourable is the fact that two sessions are overlapping and are opened at the same time which brings intense volatility. In addition, it’s easy for many scalpers to trade with the trend uninterrupted as the time finds when all the economic data releases have already been announced.
Wrong time for trading
It’s not easy to say this but any time of the day when a given currency tend to trade in a sideways pattern isn’t good for scalpers. Scalpers should avoid a quiet market like plague as it can be choppy and cause them to lose the profits they had earned earlier.
It will be equally wrong to trade currencies whose sessions are closed. For instance, a trader who uses USD, GBP and EURO should do so when both European and American markets are open. Failure to use the right currency for the right session can lower the rate of liquidity of currencies in the market. Likewise, a trader from New Zealand who like to scalping AUD/NZD pair shouldn’t attempt to trade when the Tokyo market is shut.