Scalping Trading During Choppy Markets

What are the best choppy / ranging markets conditions?

In this article I answer these questions and propose strategies counter-trend suited to these conditions:

• Off-Hours Trading (Specifically between 3:00pm and 7:00pm EST);

• Pre-News Trading (12 to 15 hours before a large news announcement);
• Scalping with short time frame in the choppy market.

In these hours the markes have lower activity typically results in choppy markets, then off-hours trading and pre-news announcements are some of the most predictable times because these time-frames have some of the lowest trading activity.

Off-Hours Scalping

Trading Hours 3:00pm and 7:00pm eastern standard time is when all the world banks are closed. The U.S. banks are closing their doors and the Asian banks have not yet opened. This is a good time to scalp the market with a counter-trend forex strategy, because in these hours banks not are moving money. Without the the great players of the market as banks around to move the markets, the currency pairs will become “choppy” and begin moving sideways range. These tight ranges that are formed are the ideal for scalping The picture below shows the low volume 3:00pm and 7:00pm eastern standard time in the EUR/USD on the hour time. In the picture you can see that the market is choppy for the two days because the banks and other institutional are out the market.

Hours Scalping Strategy #1:

Currencies as to see in previous picture after 3 pm EST do not move above/below the closing price, So for when the price reaches these limits it is sold to the upper limit and is bought at the lower limit. 
If the currency hits the high level of the range, go short. 
If the currency hits the lower level of the range, go long.

.A typical range at this time is around 18-30 pips depending on the currency you are trading. So the profit I'm looking for is about 6-12 pips. . I apply a 1: 1 risk to reward ratio.

Off-Hours Scalping Strategy #2:

An alternative way to do trading in these hours is to use 3:00 pm and 5:00 pm to set the range, which I call "Dead Time Range.

• Buy if the price is below the mid-point of the first bar after 5:00pm EST,

• SellT if the price is above the mid-point of the first bar after 5:00pm EST

Trade on the 30 min or 1H chart hour and look to pull 6 – 12 pips using a 1 : 1 risk to reward ratio.

Pre-Economic News Scalping

Before an important econmic-news announcement (as the U.S. FOMC, or the U.S. Non-farm payroll) there is a low volume of trading because most banks and institutional traders waiting to see what the news economic annuncent will be.

Low volumes favor the formation of a choppy market.

The picture below shows the 17 hours before two U.S. economic news announcements: the CPI report and the FOMC ). Here there is a choppy market that, allowed the scalping in the market several times.

The rules for scalping are the following:

• Buy if the price is below the mid-point the first bar after 5:00pm,

• Sell if the price is above the mid-point the first bar after 5:00pm.

Trade on the 30 min, H1 chart and look to pull 6 – 12 pips using a 1 : 1 risk to reward ratio.

Method for scalping with short time frame in the choppy market, strategy #3.

Time frame 2 min, 3 min, or 5 min.

Indicators Bollinger Bands (20:2.0)

RSI 6 period.

Buy

First, the RSI go oversold zone.

Second the price touches or broken the lower Bollinger Band.

When the price came back in the Bollinger Bands buy at the close of the candle.

Sell

First, the RSI go overbougth zone.

Second the price touches or broken the upper Bollinger Band.

When the price came back in the Bollinger Bands sell at the close of the candle.

Make profit 6-12 pips or at the opposite band. Stop loss 5 pips above/below the entry bar.