How To Choose The Right Time Frame For Scalping?

How to choose the best time frame for scalping

Scalping is a trading strategy that involves making numerous trades over very short periods, capitalizing on small price movements created by bid-ask spreads or order flows. For an in-depth understanding of scalping's nuances, consider reading our article which explains its main advantages and disadvantages: Top Scalping Pros and Cons.

The time frames for scalping can range from mere seconds to several minutes. The image below showcases different scalping time frames.

Metatrader4

Platforms that permit trading in seconds cater to the most aggressive scalpers, seeking to exploit every tick of the market. The 1-minute and 5-minute time frames are the most balanced and cater to the majority, offering a rapid turnover and the potential for quick profits.

On the other hand, the 10-minute and 15-minute time frames serve as a good option for beginners. They present a more manageable pace, allowing:

• Ample time for thorough analysis

• A reduction in market 'noise' that could lead to misinterpretation

Now, what stands in favor of the 1-minute time frame? It’s the immediacy. This frame offers real-time insights into market movements, enabling swift decisions and the possibility to execute a higher volume of trades. The adrenaline-fueled arena of minute-by-minute trading can be demanding, but it also offers the exhilaration of instant outcomes.

Best Forex brokers in 2024

1

9.4/10

Go to broker

eToro is a multi-asset investment platform. The value of your investments may go up or down. Your capital is at risk. Don’t invest unless you’re prepared to lose all the money you invest.

Minimum deposit:

$50

Bonus for deposit:

0%

Regulation:

CySEC, FCA, ASIC

Review

The eToro broker was founded in 2007. The company promotes itself as a social trading platform working with traders from over 140 countries. The broker has several divisions operating under different jurisdictions and licensed by different regulators. For example, eToro (Europe) is licensed by the Cypriot regulator CySEC (109/10) and eToro (UK) is licensed by the British regulator FCA (583263). The broker also has a representative office in Australia and the USA. eToro Profile Details

Pros/Cons

•the minimum transaction amount for copying is $1;

•handy functionality for passive investing;

•regulated by independent monitors;

•it is possible to purchase contracts for fractional shares (that is, to invest amounts less than the cost of one share);

•it is possible to buy shares at once (not CFDs) on the US stock exchanges.

•high spreads;

•periodic technical failures in order execution;

•lack of the most popular platforms such as MetaTrader 4 and MetaTrader 5 in Europe and the CIS;

•no access to ECN systems, orders are processed only according to the STP (straight-through processing) scheme with access to specific liquidity providers;

•there is a commission for withdrawing funds;

•impolite support staff;

•inconvenient website.

Study Review

2

9.2/10

Go to broker

Your capital is at risk.

Minimum deposit:

No minimum

Bonus for deposit:

0%

Regulation:

FSC (BVI), ASIC, IIROC, FCA, CFTC, NFA

Review

The name OANDA is an acronym for “Olsen & Associates” or “Olsen AND Associates”. It is registered in the United States and provides its clients with a wide range of financial services in most countries of the world. The company was founded in 1996 and is currently regulated in four jurisdictions. The main regulator of the broker is the UK Financial Conduct Authority (FCA). Oanda Canada is licensed by IIROC. The company has several significant awards to its credit, including a victory in the category "Best Forex Trading Technologies" from the UK Forex Awards, "Best Trading Platform" from FX Week, as well as "Best Customer Service" from the US Foreign Exchange Report.

Pros/Cons

•Minimum deposit from 1 dollar.

•A large selection of the most popular trading instruments.

•Several reliable and reputable financial regulators.

•Inconvenient and poorly functioning site.

•Lack of cent accounts.

•Lack of bonus programs.

Study Review

7 tips on choosing the best time frame for scalping

Selecting the most suitable time frame for scalping is a decision that should not be taken lightly. It is the foundation which the rapid-fire strategy of scalping is built on. Here are some guiding tips for traders to consider when determining the best fit for their scalping endeavors:

1. Align with your trading style and risk tolerance: Your personal trading style should guide the timeframe you choose. Whether you thrive on the thrill of high-speed trading or prefer a more measured approach, select a timeframe that complements these preferences. Risk tolerance also plays a crucial role. Shorter time frames generally mean higher risk. It's essential to operate within your comfort zone to maintain decision-making clarity.

2. For new traders, start broad: Starting with a larger time frame, such as the 15-minute chart, can be advantageous. It offers a more forgiving environment to learn the ropes without the pressure of rapid movements. This time frame allows for more deliberate decision-making and helps in acclimating to the pace of market changes.

3. Dual time frame dynamics: Employing two time frames simultaneously can be a powerful strategy. Scalping on a 1-minute timeframe while monitoring the 15-minute chart for overarching trends provides a dual lens for decision-making. It combines the best of both worlds - the ability to act on immediate opportunities and the insight to discern longer-term patterns.

4. Gradual transition to shorter time frames: As your proficiency in scalping grows, you can start experimenting with shorter timeframes. This progression should be methodical and based on your increasing comfort with the frenetic pace of the markets. Mastery over shorter time frames can lead to maximizing trade opportunities.

5. Seek liquidity and volatility: The ideal time frame for scalping is one that exhibits high liquidity and volatility. These conditions ensure that trade orders can be executed swiftly and that there is enough movement in price to generate profit. Periods of strong market activity, typically coinciding with the overlap of major market sessions, are prime for scalping.

6. Steer clear of low-liquidity periods: Scalping relies on the ability to enter and exit positions quickly. During periods of low liquidity, such as overnight sessions for certain currencies, the spread can widen, and slippage can become more prevalent. This can erode the potential for profit, making such times less ideal for scalping strategies.

7. Backtesting: Before committing to a specific timeframe, backtest your strategy across various intervals. This process will help you identify the most profitable and consistent timeframe for your trading style. Historical data can provide a wealth of insight into how a strategy might perform under real market conditions.

For those looking to refine their scalping strategy with the support of a suitable broker, consider this curated list of top scalping brokers: 10 Best Scalping Forex Brokers in 2024.

Choosing a broker that accommodates the nuances of scalping can be as critical as selecting the right time frame.