This is a relatively easy and low risk to scalp the Forex market, the idea is that once a Bollinger band is pierced twice, the price will react and we aim to catch the reaction. Of course, it must be said, that as usual one must be aware of any news items, or planned announcements to make sure that we dont try to stand in front of a galloping horse.

Regular reader will know that I am a scalper primarily and can trade hundreds of times a day. Using the 5 and 1 minutes Bollinger bands gives a great opportunity. Why? simple, your stop is tiny, max 1 -2 pips (depending on market volatility ) below or above the previous bar. The trade either works straight away or does not, there is no second guessing involved and no waiting for consolidation period to end. (This is many a traders mistake, they marry the trade through thick and thin. hang in during the consolidation and then get zapped hard)/ Consolidation breakout systems are discussed elsewhere in this blog. so check it out.

There are many free articles about scalping in this blog and also a paid section, which is in more detail for those who need it.

However, back to Bollinger Band scalping. I use 2 types of Bollinger bands, bith for a 14 period, but one with standard deviation 1 and 1 with standard deviation 2. The one I use for this scalping method is the SD 2, as that is usually the one most traders watch.

Once the 1 (or 5 minute) bar closes above the BB, I wait for the next bar, if it fails to reach the high/low of the previous bar, I enter a scalp in the opposite direction, I expect to me at break even, or in profit straight away, but always use a 1-2 pip hard Stop loss. in case of massive momentum build up. I am only looking for 2-4 pips, so once made I exit the trade.

If you use the Bollinger band scalping method on the 1 minute charts, you have to be fast, no sentiments, complete ruthlessness is required. Sometime it can become a longer term trade, mostly not, so only go for the longer term if already in profit and there is a compelling reason to do so. (Like a news announcement, break of support/resistance etc). These ar the small minority of these type of trades, expect fast and furious and stay out of consolidating markets. We are looking for volatility to work for us, so best times are usually before/after a major news figure (CPI, employment etc), or the London and NYC opens.

In the video below I explain the mindset I have for scalping in general.

Also, note that this is a good way to trade Binary Options. just before expiry time ( I go for the 15 and 30 minute options and enter as close as possible to expiry.)

To find out more about scalping the Forex market, check the members section of this site.