Scalping Strategies with Low Spreads for Forex Traders
In Forex trading, scalping strategies allow traders to take advantage of small price changes to turn trends in their favor. They expose traders to less risk and allow them to trade short-term trends.
Our article will explain everything you need to know about low-spread scalping.
What are low-spread scalping strategies?
Low-spread scalping strategies provide traders with trading opportunities by utilizing narrow spreads. These strategies can be helpful when there is a low price difference between buying and selling an asset, so traders can place orders and make small moves, resulting in lower trading costs. Among these strategies’ advantages are:
- Add all the small profits together to achieve a greater profit
- Spending less time waiting for long-term trades
- There is less pressure to analyze the market as a whole
- Profiting from short-term trends
Forex scalping strategies with low spreads
Gold CFD trading
In CFD trading for gold, traders speculate on its price in the commodities market by trading the yellow metal through CFDs. Because you only have to invest a certain percentage of the total investment amount, it is a beneficial strategy, while profits are based on the entire investment. As gold is one of the most valuable metals in the world, it has a high liquidity market, low volatility, and low spread, enabling you to trade both rising and falling markets.
When using this strategy, you can enter a position near the support price of a currency pair to place multiple long orders. You can confirm the success of a trade by combining it with a long- and short-term exponential moving average. When the short-term exponential moving average crosses the long-term exponential moving average from above, it signals that spreads will be low and long positions are profitable.
Alternatively, you can place a short position at the price level close to the resistance level of a currency pair if you are trading a falling market. The falling trend can be confirmed once the short-term exponential moving average crosses the long-term exponential moving average from below. Therefore, Short positions are profitable once the short-term exponential moving average crosses.
Extreme scalping
Second, with this low-spread scalping strategy, traders can place multiple orders using Bollinger bands and exponential moving averages to confirm market momentum in a few seconds to minutes.
Traders can place a long order when the short-term exponential moving average crosses through the Bollinger band’s middle line from above. This confirms a profitable long entry when the short-term exponential moving average crosses through the middle of the Bollinger band.
However, if the market is falling, you can place a short order when the short-term exponential moving average crosses the Bollinger band’s middle line. As a result, you can profit from short orders right now because a bearish trend is going on.
When a market is bullish, stop-loss orders can be placed slightly below the lower Bollinger band and above the upper Bollinger band. Take-profit orders are also placed on this strategy’s upper band during short trades and on its lower band during long trades, ensuring that profits are protected if the market suddenly moves against your order.
Bottom line
By using low spreads, you can lower the cost of transactions and earn higher profits. Using different scalping strategies and technical indicators on our forex trading platform, you can place minute-by-minute trading orders.
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