FOREX SCALPING

by Ntombi Malatsi | Jul 25, 2015 | FOREX FOR BEGINNERS

What is scalping:

The term used by Forex traders for quick opening of positions with the aim of profiting from daily volatility, and the positions usually last for about 5 minutes max, ranging from one minute.

Who is suitable for this type of trading:

Scalping Forex market can be highly profitable if done the right way, but be warned, this style of trading is not suitable for everyone, by the way, nothing is ever suitable for everyone. If you have all the time of the day (it doesn’t really have to be all day) to just sit in front of your computer and watch over those small moves on the market that happen during the day, you might just like Forex scalping. But if anxiety is your weakness, I mean if you are anxious person by nature, this style might not be for you. We all know that trading comes with some emotions that need to be checked always and be kept under control, anxiety is one emotion you don’t need here. Patience should be your middle name and also you should be a disciplined trader.

Downside of Forex scalping:

I am not sure if “downside” is the correct word to use, but this is what usually happen to market scalpers, they make a lot on those small moves for the whole day, they get super excited (take screenshots, post on social media) go back and trade more, get more excited as they make more profits, then they mess it all up by allowing it to get to their head, they increase positions, increase Lot size, trade more  and increase volume some more, and BOOM!!!  by the end of the day they lose all the profits made during the day on one trade if not the whole account, Yess just one trade , wipes all the profits, talk about the waste of time and effort, the feeling that comes after that, they feel stupid, ashamed, embarrassed and the statement  posted earlier remains on social media, and the comments keep on coming, but in reality, all that was made during the day has been “given” back to the markets, I call this a “Yo Yo” trading game, I know it, been there done that, I do not blame this on scalping though, but on my own emotions, i would just get carried away and too much confidence i guess, i know maybe you are reading this and you are still doing the “Yo Yo” game or maybe you can relate to this, it is not worth it, if you have unchecked emotions, deal with those first then reconsider scalping again. But before you even think about it, do consider the following:

• Use the stop-loss and take profits ( it is good practice and it helps with discipline)
• Not all Forex brokers allow scalping on their platform, choose the broker who won’t penalize you for scalping, but usually they do mention if scalping is not allowed.
• Do not get carried away and think that increasing a Lot size is OK, as long as your equity has not increased so should your Lot size, it should remain the same, you cannot afford to increase it.
• Be tuned in on the daily Forex calendar, know exactly what is happening around the currencies that you intend to trade. If you are tuned in daily, you can really profit from the  market movers (news events that take place almost on daily basis).

Which currencies respond better when scalping:

Major currencies: currencies from bigger economies e.g GbpUsd, UsdChf and EurUsd, they are broadly known for their liquidity and for being highly responsive to market “shocks”,  that would be referring to the economic events that happen on daily basis, so whatever currencies you choose, you better be tuned in to Forex calendar and enjoy the ride, but most of all, keep your profits and take some money home, say no to “Yo Yo”trading please. Thank you for coming here, you are much appreciated, please share the post using share buttons below.