SCALPING YOUR WAY TO A SUCCESSFUL FOREX SCORE

What is it like to be a forex scalper

Scalping, when used in reference to trading in securities, commodities and foreign exchange, may refer to either a legitimate method of arbitrage of small price gaps created by the bid–ask spread, or a fraudulent form of market manipulation.

Traders who engage in forex scalping hold onto their trades for as little as seconds and up to 3-5 minutes at most. The goal here is to grab small amounts of pips as many times as possible, generally during the busiest times in the market.

Forex Scalping Webinar

The markets are ever-changing. Every day the market adopts different behavior characteristics. Trading the daily bias allows traders the agility to fast update the market view due to its impulsive changes.

Besides analysis and bias, day trading has many more advantages. Being out of the market at the end of the trading session has a positive effect on the traders lifestyle in terms of less pressure, defined working hours, faster learning and improvement curve, and much more.

Lower Exposure in the Market

Advocates of the forex scalping method argue that since scalpers are only holding their positions for a short period of time, they effectively limit their exposure. By holding on to positions for minutes or seconds, the possibility of losing big from major market moves is slim.

Glued to the Charts

Since forex scalpers make so many moves, they have to be constantly zeroed in on their charts during trading time. Therefore, thismethod of trading is only suitable for traders who can focus their undivided attention for several hours at a time. If you have a tendency to let your mind wander or are easily distracted, scalping is probably not the best trading system for you.

Forex scalpers need to be incredibly patient and thorough. There is no big, immediate windfall with this method, so traders who are successful with it recognize that future gains will come over time.

Compared to other forms of forex trading, scalping is perhaps the most attention-demanding. During the course of a trading day, a scalper will open and close tens or even hundreds of trades. Taking care to make sure that none of these trades suffer a big loss is an exhausting, comprehensive task.

The payoff in the Long Run

Traders looking to turn a profit quickly should be warned that scalping is not that type of system. If your arelooking for big returns from each trade you will be disappointed and possibly frustrated with scalping. Scalping is a trading system for those who like pulling in small trades over the long run in order to accumulate a solid overall profit.

Automating the Process

Scalpers like to try and scalp between five and 10 pips from each trade they make and to repeat this process over and over throughout the day. As we‘ve noted a few times above, scalping is seriously demanding on traders. So for traders who can’t devote the necessary time to the method, automated trading systems might be a good option to explore.

Just use caution.

A quick web search reveals many such systems offering incredible results for their users. While we can‘t validate each and everyone, there’s a good chance many are bogus. If you decide to use an automated system, its good if you can develop it yourself.

Consistent Position Sizes

Any potential forex scalpers need to be aware that fluctuations in trade sizes will lead to a quick downfall. The core idea of scalping is that profitable trades will cover losses over a long period of time. However, if you pick position sizes at random, it is inevitable that a big, leveraged loss will hit at one point or another, leading to devastating losses for the portfolio.

Forex scalpers need to come to the trading day with a super-tight strategy that devotes incredible attention and focus to making sure trades are consistent in size.

Two Different Ways to Scalp

Scalp trades can be executed on both long and short sides. They can be done on breakouts or in range-bound trading. This subheader is a bit misleading. There arent two different methods to apply the scalping technique, but rather, two different ways to think of the process.

As a trader, the first way to think of scalping is by slow price changes which occur over a short period of time. This approach means you will benefit from slow price movements.

The other way to consider the method is as a trend follower or a swing trader. With this approach, youd still use very small, fast trades. However, in contrast to the first approach, this way encourages the trader to exploit quick and sharp movements while also keeping the focus on the overall market trends.