We know that many novice traders are afraid to engage in scalping because they believe it is mostly used by professionals. Is it so complicated and risky? Is it necessary to have enough experience in trading in the Forex market in order to engage in scalping strategy?. In this article we discuss in detail all aspects of the scalping trading strategy.
To begin with, let us answer a simple question- what exactly is scalping? Scalping is a trading (day-trading)strategy, which includes frequent opening and closing of positions to obtain small profits on the daily price fluctuations. The whole point of this strategy is the frequency. Profit from the transaction is small, only a few points, but due to the fact that you are opening a lot of transactions during the day, you get a good profit . Professional scalpers can open about 100 transactions a day and this is not the limit. It is also important to know that a scalper does not hold the position for a long time, the transaction is opened only for a few seconds up to several minutes.
Many people have heard that scalpers make a lot of money and also would like to try. But they are discouraged that they must be able to quickly make decisions, and continuously monitor the charts. If you are not afraid of these obstacles and you want to try scalping, but do not know how, then this article is just for you.
The first thing you need to remember as a novice trader is that the profit from the transaction will be very small. Also, keep in mind that every transaction will bring you only few pips profit. This means that you should be patient and have a lot of self-control when using a scalping strategy.
Next, you need to learn the best way to execute your transactions. Remember that one bad trade can cover the entire profit earned for the day. We can not allow this in any case. If you see that the deal has gone against you, close it immediately, without hesitation! Waiting in such situation is pointless.This is how a lot of people have given up using this strategy.
It is also necessary to remember the cost. Every time you open a position, you pay a commission to the broker – spread. First, you need to cover the spread, and only then you will be making a profit. That is why many traders prefer not to use scalping. But if it this does not bother you, then I suggest you a very responsible approach when selecting a broker. As you can imagine, the smaller the spread, the better for you. Plus, not all brokers allow scalping, so it is also necessary to find out which brokers allow that.
The trade itself will be carried out both with the trend and against it. It all depends on the chosen trading strategy. Most importantly, you should be able to feel the “pulse” of the market. Learning to accurately determine the correct entry point is very important. In fact, scalping is not different from the ordinary course of a trade. You just need to well analyze the market, define the entry and exit point of the position and so on. The only difference is that the transaction is opened and closed in a very short time and the profit is smaller. It is essential not to “get stuck” in the transaction, this is why it is better to use volatile trading pairs.
If you are a newbie and decided to try scalping, do not worry about it. The main thing is discipline. If you like to get quickly a small profit, then you are ideally suited for scalping. Good luck!