FOREX SCALPING | SUPPORT AND RESISTANCE LEVELS
Forex scalping is a technique which involves opening and closing the trades in a short time to obtain quick profits.
By Forex scalping trading method, we open and close trades in a short time of period with small profits on lower timeframes.
We only find confluence by the above scalping setup.
Confluence is an area with multiple support and resistance levels.
Both static and dynamic a confluence of support or resistance is more relevant to traders.
As it includes two or more essential focus points on the chart and although it might seem complicated finding confluence on the chart.
But it is not punishing. You have to train your eyes to spot chart areas.
Where multiple levels meet, finding confluence on your chart.
It’s essential for scalping because these areas offer high probability trade opportunities before continuing with the scalping setup.
It’s entirely subjective and is dependent on the trader skill experience and tools used on the chart.
To find areas with at least two support and resistance levels, one must be a static level in the other one be a dynamic level.
So we need three confluence conditions to be met for our scalping strategy. First, we need a prominent area of support or resistance.
Support and resistance is practically the foundation of technical analysis.
We need to add something else for our scalping confluence set up.
Exponential Moving Average (EMA 200)
I prefer to add the 200 EMA because a dynamic area of support and resistance level is continuously changing depending on recent price action.
Our third component in the scalping setup is stochastic.
Those pinpoint market entries.
The stochastic oscillator will help us to find out divergences on the chart.
The divergence occurs when the prices for a lower low while the stochastic forms a higher low, indicating a possible buy.
Or when prices form a higher high and the oscillator creates a lower high indicating a possible sell.
The divergence occurs when the price action is different from the movement of the stochastic oscillator.
When a divergence occurs, a potential change in price direction could be on a course.
Now we have the full set up for a confluence of dynamic and static support and resistance levels, respectively, recent market swings.
Let’s see the scalping strategy in action in this chart.
We see this level of static support and resistance, and here are the confluence areas with the 200 EMA.