Good morning traders
As it was a quiet day yesterday I thought I´d show you what I spend my time doing while waiting for H1 level trades just in case you thought I might be slacking! As well as trading the Dax I scalp the eurusd whenever I get the opportunity.
Scalping intraday Set Ups
The first thing I do is mark out the Asia range and look for scalps above and below the range. If we are biased for higher I look for dips below the range and vice versa.
Yesterday morning was neutral to bearish bias due to the down close post the FOMC. Consequently we had tests either side and both presented decent scalps especially the high pattern after the low break. However the scalp I want to show you is a break out of the triangle which then formed later in the day.
In the chart below you can see how the price was coiling within the high and low boundaries and once it broke to the downside it was just a question of waiting for a retest of the low bound and entering short. Added confluence was that the USDx looked like taking a step up, I was bearish on the day and we were at the 1.12 big fig at the entry.
Stops were at the pink line which is the New York midnight price (I´ll explain this at a later date) with a first target of the yesterday lows at 1.86 providing me with a roughly 1:2 R:R trade. Second target was the 1.1175 low which it tagged.
The end result was a trade with a 7 pip stop and a 25 pip return representing approximately 3.5 R.
If you are at your charts I strongly suggest you don’t waste your time. Get looking for these types of scalp set ups. It will increase your proficiency as a trader. Even if you´re just using paper trades – it pays to practice:).
NB: when I use the word scalp I mean it in the broadest sense largely as another term for short term trades taken during the day trading session which strictly speaking is different from the standard definition of scalping.
Investopedia´s definition of scalping is:
Forex scalping is a trading strategy used by forex traders to buy or sell a currency pair and then hold it for a short period of time in an attempt to make a profit. A forex scalper looks to make a large number of trades and earn a small profit each time. Because the objective of a forex scalper is to make a small amount from many trades, the scalper holds onto these trades for a matter of seconds.
I cover all this type of trading in my coaching. So if you´re ever interested give me a shout at firstname.lastname@example.org
OK now you know that I spend my time productively what´s on the ticket for today.
We have some Flash estimates of CPI for the EZ but the main act is NFP later at 14.30 CET.
The Daily Chart
We had another down close yesterday below the major swing low at 1.1175. This doesn’t auger well for the eurusd but we need to get clear of NFP before we start thinking further ahead. If you recall I have mentioned a number of times that there has been no material change in monetary policy divergence between the US and the EU so I am still expecting lower prices in the next few months.
But as I have also mentioned, my macro bias doesnt out rank my daily view and I will only trade the shorter time frame based on my more technical price action analysis. For today I will be looking for scalp opportunities in the morning with a neutral to bearish bias for the early session.
Once NFP is printed I will re assess and see whether there is anything to do.
The Hour Chart
As its NFP I am not setting any model levels for today.
I have marked up a number of levels that look good as reaction points in the morning session prior to the data.
Good luck, have a great weekend and I will be back on Tuesday as I won´t be around Monday.