What is Scalping in forex
Scalping is like those action movies that keep you on the edge of your seat.
It's fast, exciting and exciting at the same time. These types of operations are usually only held for a few seconds to a few minutes.
The main objective of scalpers is to get small amounts of pips as many times as possible throughout the day and especially during the busiest times of the day.
To trade with the Scalping strategy, traders basically need to be glued to the charts. For this reason it is more suitable for those who can spend several hours of total attention to their negotiations. It requires intense focus and quick thinking to succeed.
It is not for those looking to make big profits in each trade, but for those who like to make small profits consistently for the long term to obtain a considerable overall profit.
It is indicated to be a Scalper if:
- Likes quick negotiations and emotions
- Don't mind focusing on graphics for several hours at a time
- He is an impatient person who does not like to wait for long negotiations
- Can think fast and change bias or direction quickly
- Has fast fingers
It is not indicated to be a Scalper if:
- Easily stressed in fast-moving environments
- You cannot dedicate several hours of total attention to your graphics
- Prefer to make fewer trades with greater profit gains
- Likes to analyze the general image of the market
Some things to consider if you decide to be a Scalper:
Trade only the most liquid pairs and take Spread into account
Pairs such as EUR / USD, GBP / USD, USD / CHF and USD / JPY offer the lowest spreads because they tend to have the highest trading volume. The goal is for your spreads to be as tight as possible, as you will enter the market frequently.
As you enter the market frequently, spreads will be a big factor in your overall profit. Make sure your goals are at least twice the spread, so you can take into account the times when the market moves against their positions.
Try to focus on just a couple first
Scalping is very intense and, if you can put all your energy into one pair, it will increase your chances of success.
Trying to scale with several pairs at the same time as a beginner is a bad idea.
Start by getting used to the pace of things first and then start adding another pair and see how it works for you.
Management of your capital
This goes for any type of negotiation, but because you carry out so many transactions in one day, it is especially important that you stick to risk management practices.
Although it is always painful to lose part of your capital to Stop Loss, it is essential to not lose all your capital waiting for the market to reverse. Following a trend or not, don't forget that the Forex market is an extremely volatile market where the trend can change from one minute to the next.
Which brings us to the next and last point.
The Influence of News
Due to slippages and high volatility, trading during highly anticipated news can be very dangerous.
It sucks when you unexpectedly see the price go up in the opposite direction of your trades because of news!
Be prepared and know what's coming by consulting the economic calendar.
We hope that with this article you will be more clarified with the psychological and scaling aspects.
Our team of traders has been using this strategy for many years and anyone can say that although it is very stressful and has its risks, it is a very profitable strategy when well applied.
Any question do not hesitate to get in touch through the usual means