SCALPER

The scalper has the goal of a quick trade for small but leveraged profits. The scalper
prefers to trade frequently for small moves instead of working for larger moves. The
scalper focuses on the goal of taking profits quickly from the market and trades in a
very limited time frame. Scalpers focus on the most recent price action and on small
time intervals, from 10-minute candles to 1-minute candles. The trader seeing a high
probable trade can decide to put on multiple lots and then attempt to obtain 5 to
10 pips or more. Parabolic patterns are excellent conditions for a scalp. After a parabolic
move up, the probability of a fading of the sentiment is great. The scalper has to minimize
the risk of a whipsaw. There is no perfect strategy, but the use of renko blocks will clarify more precisely than candlesticks when to get in and out of a scalp. Figure
14.6 shows the situation facing the euro–U.S. dollar (EURUSD). There was a parabolic
move up, indicating a potential reversal. The question was when to get in and out for
a scalp.
Let’s see how a renko scenario would have worked. Mr. Ashkan Balour is a professional
forex scalper trader who focuses on capturing moves like a hawk looking for prey.
It takes experience in pattern recognition, but Ash is an example that forex trading can
become a profitable endeavor. Figure 14.7 is an example of one trade he did; his own
description of it follows. Ash is quite a good trader and was able to pick off 15 pips without
1-minute candles. Compare his candlestick view with renko. The newcomer to forex
scalping should use renko to help out.

I just finished this trade. The dollar has been weak all day. It came down from the
top of about 1.9673. It did one wave down to around 1.9645, then started to form
a pendant and went lower. I was looking to go long the whole time. I waited till it
did a three-wave sequence down under the pendant. On the third wave, it entered
an area of support in the 1.9630 area. I read a comment that there were buyers
here around 1.9630, which is not my reason to trade this area but gives you some
confidence. On the first up candle I was long, 1.9636; I waited until the first red
candle and bagged 15 pips easily. Most trades aren’t this quick and easy.


By ABE COFNAS