Traders involved in scalping make many transactions in a short period of time, which they close when they receive at least a small income. To ensure that one unprofitable position does not “eat up” all the profit received, you need to strictly adhere to the recommendations of money management. This is especially true for Forex; for binary options there is a slightly different approach.
Scalping at night: weigh the pros and cons
It is possible to engage in scalping at night if you use a reliable strategy. During the Asian session, most currency pairs show a flat.
Advantages of night trading:
- there is no need to make long-term forecasts;
- quotes fluctuate within a fairly narrow channel;
- there are no important news causing sharp price increases.
If an investor bases his trading on “catching” trend movements, the transaction may not be closed for a long period; in scalping, he needs to determine the direction of short-term fluctuations and quickly buy a contract.
Why scalping on binary options is a great solution:
- The option expiration time is short, so there is less risk;
- detecting minor movements in the value of an asset is simpler and easier; there are many more of them on the market than strong trend ones;
- an investor can combine his main job and trading;
- There is less load on the platform, there are practically no freezes.
Some successfully combine trend trading, concluding trades using signals on higher time frames, and scalping, finding suitable entry points on smaller time frames.
But experienced “speculators” will tell you the disadvantages of this approach:
- low volatility reduces the number of successful moments to open a position;
- attention is distracted, causing drowsiness, and the risk of making a wrong decision increases.
Trading recommendations
The best time to work is between 23.00 and 3.00 Moscow time. During this period, fluctuations are insignificant. The American session ends and Australia and New Zealand enter the game. The most effective strategies are rebound strategies.
One way to make trades is to watch the price move in a limited channel. When it reaches its upper limit, it’s time to sell, and the lower limit, it’s time to buy.
When drawing up a trading plan, keep in mind that for some pairs news may be released at night. For example, this applies to the New Zealand and Australian currencies, so work with the more predictable and calm assets that sleep at night USDCAD, GBPUSD, EURGBP, GBPCHF, GBPCAD or USDJPY.
You can trade both options with standard conditions and modified ones. Classic options bring profit if the trader correctly indicates the direction of price movement. In a range option, the investor predicts whether prices will fluctuate in or out of a certain channel. The scope of the price corridor is set by the broker.
Profitable Strategies
The best trading systems are available to anyone, they are available in the public domain completely free of charge.
Bollinger Bands Strategy
First you need to prepare a terminal:
- choose a timeframe of 15 minutes;
- install the indicator;
- We leave all the settings as standard, except for the deviation - change it to number 3.
How to make deals:
- Select “Put” if the candle closed above the upper line of the indicator;
- “Call” - if lower;
- expiration time - 60 minutes.
Trading using Parabolic signals
The indicator shows a price increase if the points are below the chart, and a price decrease if they are lower. When there is a clear trend in the market, they enter the market in the direction of the Parabolic reversal, but at night there is no clear trend, so you need to enter into a deal in the opposite direction in order to make a profit on the correction. Expiration time is 1 hour. The higher the volatility, the more false signals there will be, so calm night time is the best time for this strategy.
When the indicator points are too close to the chart, you should not trade; strong fluctuations are likely.
Donchian Channel
The operation of this indicator is based on the minimum and maximum prices for a certain period of time. Based on these numbers, he draws the range of the channel. When the border is broken, an entry signal appears. The choice of “Put” and “Call” depends on which border the price touched - upper or lower, the expiration time of the option is 1 hour. We conclude a deal after the signal candle closes. If there was a breakdown of the level, but not a touch, we do not enter the market.
Download Donchian Channel for free
Strategy “from the borders of the channel”
You can draw the range of price fluctuations yourself, without using indicators. To do this, we find three conditional points that will become the basis of constructions. It is better not to draw lines through the highs and lows, but to build a channel along the bodies of the candles. The trading strategy is similar to the other channel strategies described above. We select the expiration time ourselves: it should be approximately the same as the average price needs to move from the upper border to the lower one.
Important tips for scalpers
For most trades to be profitable, you need to follow a few simple rules:
- Control yourself. Market analysis should be done without unnecessary emotions; trading is also contraindicated if you are upset or overexcited;
- Do not enter into trades on Mondays and Fridays, as sharp fluctuations and unpredictable movements occur on these days. A similar situation occurs at the beginning and end of each month;
- Remember the release time of important news or study the trader’s calendar every day at the beginning of the day. You shouldn’t work an hour before the news comes out and for some time after its publication;
- do not rely on the signal of only one indicator, use additional “filters”.
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