Forex Scalping – Complete Beginner to Advanced Strategy Guide
As the term indicates, forex scalping is a method of maintaining short opened transactions, in order to obtain profit. Literally speaking, it means a small steps strategy, in which are involved many quick moves of opening and closing positions, due to bring profit. Usually, traders use this method in order to accumulate repeatedly gained profits, but paying attention to the risk of loss involved.
In order to be more specific regarding the shortness of the transactions, we need to explain that scalping forex transactions are kept opened starting with some seconds and are not due to last more that 3-5 minute. Usually, traders maintain a position up to a full minute.
Forex Scalping is known as a basic trading strategy due to its characteristic of bringing quick profit. In the meantime, it is very important to keep in mind that the trading volume has a big impact on the profit, as well as on the loss. Usually, traders that prefer this strategy are inclined to accumulate profit from several quick transactions, in order to open long term transactions. Also, because the loss risk remains high, they are often advised to place trades with low volume.
Despite the fact that these strategy seems to need less time than long term trading transactions, opening repeated quick positions and closing them, in order to accumulate profits and attenuate loss may involve more time spent in placing orders.
When first using scalping it is very important to know that:
- You will have to use instruments that have low and very low spreads, such as:
a) forex currencies (that have high liquidity), EURUSD, GBPUSD, USDJPY etc. ;
b) commodities like gold and oil;
c) stocks like Apple, Microsoft etc.;
- You will have to work with a broker that can offer you live data feed.
Most of the traders that use this strategy are delighted by the thought of a quick and easy way to get profit, without taking into account the possible risks of loss. This is why, we are going to show you next some of the primary advantages and disadvantages of using this trading strategy:
- You can make money in a relatively short period of time;
- You can use simple trading systems like a support / resistance breakouts;
- The number of profitable transactions should by far exceed the number of losses, in order to arrive at a favorable final result
- The risk reward is usually in the disadvantage of the trader (he generally establishes a bigger stop-loss than take-profit).
1. 6 Essential Scalping Tips
For Beginners – In order to understand advanced scalping knowledge there are 6 must have tips that you must get to know before going any further.
2. How to Choose The Right Broker For Scalping ? – In order to increase the changes of profit, one of them most important factors that can influence the outcome is the brokerage house service provider, learn how to analyze and what to watch out for.
3. What Are The Most Profitable Currencies for Scalping – Not all pairs are recommend in scalping, get to know how to find the most profitable currencies.
4. Simple Forex Scalping Strategy For EURUSD and GBPUSD - It’s not the time to put all the theory to work in a simple scalping trading system for major pairs based on a combination of candlestick patterns, that offer reversal signals, and the Relative Strength Index (RSI).
5. Advanced Forex Scalping Bollinger Strategy - After mastering the simple ways of scalping strategies, you need to move forward and view the options and advantages offered by advanced strategies, like ones using Bollinger Bands.
6. What Are the Recommended Trading Hours for Scalping ? – Depending on the chosen currency not all trading hours are best suitable for scalping, one of the most common mistakes is to enter the market during moments of low trading volumes / volatility – this usually happens by not knowing the recommended trading hours.
7. EMA And Stochastic Scalping Strategy For USDJPY – Many traders have a tendency to stay away from the heat of major overtraded pairs (like EURUSD) and prefer to apply scalping to a volatile, but in the same time rules following pair, like the USDJPY (also know as the “ninja”). If you are one of those traders, here you have a dedicated, basic but efficient strategy that uses EMA and Stochastic to scalp Asia’s favorite.
8. Top 3 Questions A Scalper Should Know The Answer To Today – Get the right answers to the most common questions in the mind of a professional scalp trader regarding systems, emotions and consistency.
9. 4 Questions To Become A Better Scalper - If you really want to become the ultimate expert in short time frame traders you must know how to act in the trending market or range, what do brokerage firm think and if you should think about trading only on manual or automatic.
10. Final Conclusions On Forex Scalping - The last step to fully understand what is a scalpers job and what are the pro’s and con’s.