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Scalping in Forex Trading with Moving Averages

Is scalping your trading style? If you focus on creating profits on very small price changes with positions entered and exited within a short time frame, you could use indicators to help shape your successful scalping strategy. Once you have a basic knowledge of forex scalping, our experts will help you better understand indicators that you can use to scalp forex signals. 

Finding the best indicator for scalping forex signals can be difficult, but based on our years of experience, some indicators will do a better job of giving you a head start to scalping successfully. So now let’s take a deeper look at one of the best scalping indicators, moving averages.

The Simple Moving Average is first on the list of scalping indicators that can be used to create a very simple strategy.

Simple Moving Average Scalping Indicator for Forex Signals

The simple moving average shows the average price over a specific time period allowing you to know if the price is going up or down, thus identifying a trend. So, for example, if you wanted to plot the 7 period on a 10-minute chart, you would add all the closing prices of the last 70 minutes and divide that number by 7. 

A 5-7-13 simple moving average can be shown in periods on a 1-minute chart. The lines of the 5-7-13 moving averages will stack up, pointing either above or below. Trends have prices stuck to either 5 or 7-bar simple moving averages. Diminishing strength is depicted when price penetrates the 13-bar moving average, an indication of a range bound market or a reversal signal.

The smaller space between the lines when the ribbons are somewhat above price bars represents a sell signal, while more space among the lines when the ribbons are aligned somewhat below price bars is a signal to buy.

While simple moving averages are excellent to scalp forex signals for entry techniques, the main downside is they lag behind the price since they average the price of previous time periods. 

If you’re ready to dive into using scalping strategies, you’ll want the accuracy provided by a top charting platform such as SmartTrader.

RELATED: Scalping with Parabolic SAR in Forex Trading

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