This is the TimeToTrade help wiki. Use the TimeToTrade Trigger Trading Technology™ to execute your trades when Price, Candle Stick, Trend Line, Volume and Technical Analysis chart conditions are met - no coding required. Trade directly in the world’s global markets. Backtest your Trading Strategies. Calculate your UK HMRC Capital Gains Tax liabilities. Manage your Investment Club.
Forex Trading Strategies: Scalping
Trader Profile: Larry Ottaway
We chat to day trader, Larry Ottaway about his strategies and tips for success.
Which markets and instruments do you invest in?
Specifically forex markets and mainly EUR/USD because it has the lowest spread, which is particularly important in forex scalping.
What is Forex trading?
Literally trading one currency against another in pairs. ie, with EUR/USD either the euro is going up and the dollar going down against it or vice versa.
Which brokers do you use and how do you rate them?
For my particular type of forex scalping, Currenex brokers are preferred as they reflect the real market. The downside is the relatively high entry level (larger account needed). My favourites are FXDD and ADM Derivatives. For a small account Oanda is a possibility BUT they are “market makers” creating their own approximation of the real market. So watch out for their infamous late fills, slippage galore and freezing platforms.
What are the pros and cons of a spread betting account versus a forex account?
Forex accounts offer greater control for the small pip targets in scalping. On the other hand spread bets are tax free ... but I never use them.
What type of investment strategies do you use?
This is where I could write a whole book ... there are two big concepts here. Firstly, as already mentioned, scalping and secondly VERY short time frames. Scalping trades are very quick dips in and out of the market often within a matter of seconds. Targets might only be 2 or 3 pips per trade (or more) and the logic is that once you become experienced it is relatively low risk because of this tiny exposure to the market. Two pips might sound ridiculous until you do the math on compounding. With a high hit rate it’s possible to trade around half a percent of account per pip. An average of 3 pips per trading day then becomes 1.5% per day or 7% per week. As to very short time frames, the myth is that any time frame less than one minute or even 5 minutes carries too much “noise” to be tradable. That’s not true. I successfully trade a one SECOND time frame on the basis that the moves are caught much earlier than the higher frames. Up to a year ago I had to use Oanda which had the shortest frame at 5 seconds. I have now replaced this with Ninja Trader software giving me the one second.
Which technical analysis indicators do you use and what do you look for?
I use weighted Moving Averages to give a very detailed picture of what the market is doing. After extensive screentime or market watching you begin to recognise particular patterns that frequently repeat and offer high probability set ups.
What would you say are the major factors that influence a currency's price movement?
Obviously standard economic and political news but also you never quite know when Toyota or Chrysler for example are going to be shunting around vast amounts of money, spinning currencies into unexpected directions in a split second. Hence once again the advantage of minimal market exposure.
How have forex traders been affected by the current economic crisis?
Experienced scalpers are pretty much immune to the crisis. Business as usual. There have been phases of increased volatility from time to time but that just means more pips. One downside has been smaller account sizes on the basis that if you don’t know which banks could go pop you also don’t know which brokers could go the same way. Another obvious, but sometimes overlooked point is that the forex market can’t crash ... as one currency is going down the other in the pair is going up.
In your opinion should traders use stop losses?
Tight mental stop losses are vital in scalping because one big loss could obviously wipe out a whole series of small gains. My stop is sometimes as tight as two pips plus spread. Preset stops can also be useful if connections fail.
What's the most important lesson you've learned from your investment mistakes?
Rigid discipline on mental stops. When you enter a trade know EXACTLY where you will exit if things go wrong. No hope, no fear.
What are your tips for trading during volatile markets?
With scalping, widen stops and widen take profit levels.
What advice would you give to anyone who is thinking about taking up FX trading?
Watch out for the sharks selling endless systems and courses. 95% of it is overpriced useless junk. Expect to be learning on demo accounts for at least a year if not two. Find a method or system that suits you and practice, practice, practice. Think of it like learning a musical instrument. You’re going to be crap for quite a while ... you’ll slowly get better and better ... and eventually you’ll be paid very very well.
It has never been easier to execute your trading strategy. Our Trigger Trading Technology ® means you can now automatically execute your trades directly in the world’s global markets.
You need never miss a trading opportunity again!
Do you want to:
- buy when your technical analysis chart conditions are met? Really buy, not just get an email or sms alert?
- or sell when a support trend line is broken?
- or back-test your strategy going back as far as 30 years?
TimeToTrade's Trigger Trading Technology™ is truly game changing. It gives you a trading advantage. The power to take your trading to a new level.
Open a FREE TimeToTrade account today to:
- Trade UK, US and European Shares - apply now
- Execute trades when your Price, Candlestick, Trend Line, Volume and Technical Analysis chart conditions are met using the Trigger Trading Technology® - learn more - help video
- Email and SMS Trigger Trading™ Alerts - learn more
- Trade Off The Chart - learn more
- Back Test Trading Strategies with up to 30 years of historical data - learn more
- Create Simulated Trading Accounts to test your Trigger Trading™ Strategies - learn more
- Real time Forex, UK, European and US stock market data - learn more
- 170+ Technical Analysis and Candlestick Pattern Indicators - learn more
- All the tools you need to set up and run a successful investment club - learn more
- Manage your Portfolio and calculate UK HMRC Capital Gains liabilities and SA 108 CGT Tax Returns - learn more
- Create Trading Competitions for you and your friends - learn more
- Apply for a trading account today to get the Live Account Features - apply now
Apply now to try our superb platform and get your trading advantage.
The information and data provided is for educational and informational purposes only. Interpretation and use of the information and data provided is at the user's own risk. All information and data on this website is obtained from sources believed to be accurate and reliable. However, errors or omissions are possible due to human and/or mechanical error. All information and data is provided "as is" without warranty of any kind. We make no representations as to the accuracy, completeness, or timeliness of the information and data on this site and we reserve the right, in its sole discretion and without any obligation, to change, make improvements to, or correct any errors or omissions in any portion of the services at any times. Past performance is not a guarantee of future results. Trading carries a high level of risk to your capital and can result in losses that exceed your deposits. It may not be suitable for everyone so please ensure you fully understand the risks involved.
All services are provided by TigerWit Limited. TimeToTrade is a trading name of TigerWit Limited (a company registered in England and Wales under number 9479466). Our Registered address is TigerWit, 7th Floor, Augustine House, 6A Austin Friars, London, EC2N 2HA, England. TigerWit Limited is authorised and regulated by the Financial Conduct Authority number 679941.
The trading services offered by TigerWit Limited are not available to residents of the United States and are not intended for the use of any person in any country where such services would be contrary to local laws or regulations. Subscriptions to TimeToTrade products are available if you are not eligible for trading services.
Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 64% of retail investor accounts lose money when trading spread bets with this provider. You should consider whether you understand how spread bets and CFDs work, and whether you can afford to take the high risk of losing your money. All clients should be aware that trading involves risk.