Junichi's Scalping Classroom | Episode 2 It's actually simple! Scalping trades! [Junichi FX]
Junichi FX Profile
Junichi FX. AFX scalping trader, FX mental advisor, FX coaching, financial planner, insurance agency, and management consultant, active in many fields. Trading with a monthly goal of 1000 pips, focusing on price action-based scalping.
Twitter:https://twitter.com/junichi_fx
※This article is a reprint and revised edition of an article from FX攻略.com, November 2018 issue. Please note that the market information written in the main text may differ from the current market.
In the first part, we discussed common misconceptions about the true nature of scalping, such as “few participants choose scalping, yet many succeed,” “a method favored by many consistently winning traders,” and “it results in relatively low mental burden.” With that in mind, this time I would like to outline the basics of scalping and the study methods I have practiced.
The Basics of Scalping
Although scalping is often crudely distinguished by short timeframes and small pip gains, this is a misunderstanding; in reality, it lies in the way you target opportunities and your trading posture.
For example, as one standard trading method, if you wait for pullbacks or bounces in the direction of the higher-timeframe trend and enter on a reversal signal, that is the same pattern in principle for both scalping and day trading or swing trading. However, in actual trading there are many criteria for reversals and stop lines, and by scrutinizing these you can find “points with higher edge” unique to scalping. Moreover, because these points are small in timeframes and waveform (the highs and lows drawn when viewing the chart as a whole), they appear far more frequently than in other styles.
As for exits, day trading or swing trading targets profits across one or more waveforms or higher-timeframe waves or technical lines. In scalping, on the other hand, exits are based on places where the edge falls below a certain threshold, such as before the completion of a waveform on the same timeframe, just before a recent resistance, or a specific technical line (the exact threshold varies by volatility and the scalper). This makes it possible to achieve a very high win rate. Likewise, the stop-loss criteria are points where the edge falls below a certain threshold.
Saying it this way might make you think “scalping is difficult after all,” but there is no need to overthink it. It’s a very simple trading style that aims only at high-edge points, and once you can build a few patterns of rules, any market situation can present a opportunities.
