FOREX SCALPING | SUPPORT AND RESISTANCE LEVELS

FOREX SCALPING | SUPPORT AND RESISTANCE LEVELS

Forex scalping is basically a technique which involves opening and closing the

trades in a very short period of time in order to obtain quick profits.

This trading method is based on opening trades and closing them with small

profits on lower timeframes.

Dynamic Support and Resistanc

The Forex scalping setup is based on finding confluence.

the 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 important focus points on the chart

although it might seem complicated finding confluence on the chart.

But it is not difficult you just have to train your eyes to spot chart areas.

where multiple levels meet finding confluence on your chart.

it’s very important for scalping.

 

because these areas offer high probability trade opportunities before you continue with the scalping setup.

Dynamic Support Resistanc

It’s quite 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 of them must be a static level in the other one at a dynamic level.

So we need three confluence conditions to be met for our scalping strategy

first, we need an obvious 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 as a dynamic area of support and resistance level is constantly changing depending on recent price action.

Confluence Area

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

forms a lower high indicating a possible sell.

The divergence occurs when the price action is different from the action of

the stochastic oscillator.

Stochastic oscillator

When a divergence occurs a potential change in price direction could be on a course

So 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.

 

About Muhammad Shahid

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