The GBP/USD, also known as the cable, is one of the most volatile currencies on the Forex market and is well known for its quick swings in trends. It is, however, the currency that is the most traded and the currency that is the most profitable in the shortest time. Scalping the GBP/USD is a great way of making some quick profits throughout the day especially if the currency seems to be caught in a large channel.
I would not recommend scalping this volatile currency to beginners as I previously mentioned it can swing around very quickly. It is important to know your spread betting platform inside out and the speed that you can enter or exit a trade is going to be indicative to your profits. I would also recommend that you use a spread betting company that has the lowest possible spread for the GBP/USD, one or two pips is about right but beware of spread betting companies that fluctuate there spreads with the market situation.
The chart set up that I use to scalp the GBP/USD is a very simple 1-minute chart frame with three exponential moving averages. I set the EMA’S to nbr60, nbr20, nbr10 and I colour them as follows; the EMA 60 is red, the EMA 20 is blue and the EMA 10 is red. Although the red EMA is there it plays a back seat in this trading method, it is only there to give us an overall idea of the long term trend. The two smaller EMA’S are what we are going to use as entry and exit signals for the trades.
We are looking for the crossover of these two moving averages to indicate that the trend is changing direction. Once we have confirmation of this crossover we are then looking for the most recent past support or resistance level to be broken. Once we have this we need to enter the trade very quickly and straight away bring up a closing ticket and prepare to exit the trade. I would use a very small stop loss for these trading no more than 10 pips, once in the trade look for the break out followed by stallage. Once the 100 GBP to USD 129.28$ starts to stall then it is likely a short reversal will follow and get out of the trade with 4-10 pips is better than a loss. You can always re-enter the trade when it goes past the next low or high.
It is a good idea to have another chart set up with the same moving averages for the GBP/USD set to 5 minutes. If the crossover happens on this time frame whilst you are still in the trade then it is worth moving your stop loss up to the entry point and trying to ride the trend out for as long as possible. This is how you can end up with very large profits from simple scalping trades on the GBP/USD.
Adam had been trading Forex for 4 years with little success. Adam originally did not know the forex markets so he joined Colin Atkin’s private member’s club. Colin is a professional trader who shares his trading live, over a webinar three times a day 5 days a week, all you have to do is copy what he does and take the profits. Since Adam joined Colin he has had the money to invest in other projects and gone on to be a successful full-time Forex trader and internet marketer.