Best Forex Pair For Scalping
Best Forex Pair For Scalping
Scalping is a unique technique of trading. Many things to consider before applying this technique, one of which is forex pairs that will be traded. What are the best forex pairs for scalping?
As one of the popular trading strategies, scalping is a special activity that requires fundamental techniques and preparation to produce its best potential. Many things to consider before starting to use scalping techniques.
One of the things to watch out for is the best forex pairs for scalping. The best currency pair for this technique is a pair with a tendency to not move sharply or not often an unexpected jump. Choosing the right currency pair will not only affect our strategy but also the profit.
There are three types of pair types that are suitable for the technique, the major pair, carry pair, and exotic currency. For beginners, which are the best forex pairs for scalping?
1. Pair Forex Major
Included from the major pair is EUR / USD, GBP / USD, USD / CHF and pair formed from the currency most dominate the world economy. Although JPY can be put into this group, they have a different movement than other major pairs. JPY is different and will enter in pair carry group.
The main nature of the major pair is liquid. The nature of both is a relatively quiet response to market turmoil. For example, AUD / JPY pair can move up to 100 pips against a market fluctuation, while at the same time EUR / USD pair will only move 30 pips. Pair major is traded worldwide almost by all major banks and institutions. They became the giant currency in the market because of trading volume and relatively slow movement.
Scalper reliable tend to trade slowly and carefully to get a conservative profit will tend to choose major currency pair as the best forex pair for scalping
2. Pair Carry
Pair carry is a liquid currency pair, but turbulent. Currency pairs such as EUR / JPY or USD / JPY are traded around the world and their trading activity is quite solid, but they are also very fast moving. This is due to the large number of financial actors who use the Japanese currency to borrow and invest in various risky assets. As a result when the market turmoil, forex pairs will react with excessive and result in traders can not predict the movement of the pair easily, especially for users of scalping techniques that work in short timeframe.
Pair Carry is generally traded to earn interest. Although it is possible to do scalping, but this currency pair is not the best pair for scalping. Spread pair carry can widen so rapidly, even stop-loss will not be able to save your account from significant loss.
Widespread spread changes are not surprising in carry pairs. While in major forex pairs such as EUR / USD, such drastic movements are generally seen only after the release of NFP data or changing the major pair rate. Compared to major currencies, pair carry will move with frequency more often, deeper, and durable.
Therefore, it is not recommended for beginner traders to use the scalping technique on pair carry. A reliable scalper generally trades pair carry with common trends and follows strategies for strategies to exploit sharp changes.
3. Exotic Currency
Exotic currency in question is a forex pair of rare, less liquid, and less known so not included in the best forex pairs for scalping. This group is included in volatile currencies such as NOK / USD (NOK is Norwegian Krone), Russian ruble, BRL / USD (Brazilian real) and others.
This group is not suitable for scalping due to unpredictable price differences making it difficult for the scalper to predict its pegging in a short period of time. Traders with scalping techniques should be able to avoid these exotic currency pairs in order not to lose money.
It can be concluded that the best forex pair for scalping is the major pair. Scalper can use pair carry if it has found the best strategy to scalping on the pair. However, still advised to be careful. In addition to what pairs are best for scalping, traders also need to pay attention to each spread before applying the strategy. Spreads are too large to harm a scalper playing in a low timeframe.
The exact trading time period also needs to be considered when scalping. Traders have a tendency to choose trading time according to their strategy. Some scalping users like a period of time where market conditions have no direction, while other scalpers will choose to trade in targeted markets, high liquidity and diversity. This choice is in accordance with the tastes of each trader, because both offer different conditions. Choose a trading time that suits your strategy.
Scalping is a strategy that requires concentration and special skills. If you want to try this strategy to make a profit. keep in mind that traders should test strategy, choose the best pair for scalping. Note also the brokerage policy where you are trading. Choose a broker that provides good trading conditions and allows scalping techniques.