EUR/USD Forex Scalp Setups
Al Brooks | Jul 13, 2016 09:19AM ET
There are entry setups on almost every bar of every chart. I highlighted many on this 5 minute chart of the European session. All were good for 10 pip scalps. Many scalpers will use 20 – 30 point scalps, although they usually exit before their stop is hit. Many will also scale in.
Nothing has changed on the daily chart of the EUR/USD forex market. It is still in its month-long trading range after what was probably an exhaustive sell climax. I wrote yesterday about the daily chart of the EUR/JPY after the June sell climax. The EUR/USD had a similar bar, but the context was different. Rather than a bear breakout below a bear channel, the big bear bar formed within a trading range.
Because the daily chart is in a tight trading range, the bulls and bears are balanced. However, as the result of the tight trading range being near the bottom of a bigger 5 month range, and because of the sell climax 3 weeks ago, the bulls have a slightly greater chance of success. Yet, the probability advantage is small. If it were big, the chart would be in a bull breakout and not a tight range.
h3 Forex scalping/h3Day traders are scalping for 10 and sometimes 20 pips. This is very difficult for most traders to do profitably, but it is the only way to make money as a day trader when the range is only 40 pips. Why is it difficult? Time. Many traders do not trust the setup as it is forming. By the time they decide to take it, they are too late. The market has already moved several pips, and that makes it difficult to scalp for 10 pips.
Moreover, many beginners get frightened if the market goes 10 pips against them. Many experienced traders will add to their position as long as they believe that their initial premise is still valid.
Most trading range breakout attempts fail, so the odds are that the EUR/USD forex chart will work higher over the next week or so. However, it might have one more push down first. That is why it has been in a tight trading range for several weeks. The bulls and bears are balanced, and each is fighting over the direction of the breakout. While the market will eventually break out, in the meantime, EUR/USD forex day traders are continuing to mostly scalp.
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