Scalping is a strategy that most of newbies listen in the beginning of their career. In forex trading, scalping has too much attraction as it can give unlimited chances of making money within shortest possible time. Actually this is very simple strategy. In this strategy we open and close trades very quickly. Sometimes traders close trades after three to five pips only. This profit doesn’t include the spread. Some brokers have fixed spread and some have floating spread. If it is fixed then the spread will exclude from trade and after that traders can close trades with 3 to 5 pips. This is a normal routine of short term trades.
Short Term Strategy
In real short term trades, traders do short time trades. Not within seconds just like scalping. They usually close trades after 5 minutes to 15 minutes. They use candle stick formation to open and close trades. They open trades on formation of candle and the close trade when the candle formation completes. This is one strategy among hundreds of strategies. Short term strategy doesn’t ends on this one. Traders and readers of this website can make their own strategies.
Traders usually do the scalping in forex trading. Because of the volatility of forex market and the minimal spread. There is another thing gives attraction more, that is leverage. Only forex broker can give high leverage, trader will not see high leverage in commodities market or stock market. Because of high leverage, it is easier to make small trades within shortest time and the equity will remain in good condition. Even if trader is trading with only $10 capital. He can easily do his scalping with that much amount.
Why traders choose scalping strategy to trade with? This is because it is easiest and fastest way to double their investment within shortest time. Sometimes traders make their investment double within 10 minutes with the help of scalping. Now readers can understand that how much they can make with scalping. But if there are some pros then there are some cons too. It’s attractive and money making strategy, but if it is used in proper means. If the trader doesn’t know where to start trading and opens trade without knowledge of market, then he will lose his all money. Opening trades on running market is not easy task to do. In high fluctuating market, some traders may see problems in trade execution.
Market knowledge and chart analysis is very much important for scalper. The traders with scalping strategy is called scalper in forex market. Scalper should know the trend of market and should drive himself in the trend not against the trend. There are so many traders trade against trend of market. This is another strategy, but it works with big capital accounts, not with small accounts. Every trader should understand that he will have to trade according to his capital. A lot of learning he should do before he head to trade.
In scalping, traders can merge another strategy that is called hedging. This is necessary when he has no choice, if the market goes against his analysis. Hedging looks easy, but it isn’t. Hedging is allowed in meta trader 4 only, if you are trading with meta trader 5 then it is not allowed. We will tell our readers about hedging in next article. If you have any question or query, then please comment below.
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