FOREX SCALPING –EVERYTHING YOU NEED TO KNOW

Forex scalping is a kind of short-term arbitrage trading by which traders leverage on small price movements in order to make profit. Traders engaging in scalping hold extremely short trading positions (probably lasting a few seconds/minutes) during which they sell/buy Forex pairs. Capitalizing on price changes, the traders continuously do this all through the day in order to reel in steady returns.

For each position within the day, traders try to scalp as many as 5-10 pips. Forex scalpers do this to ensure that before the day ends, they are able to make a great deal of profit.

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This post is a comprehensive review of Forex scalping and asides guiding you on how to easily scalp Forex, it provides information on other things you may want to know about scalping.


The Easy Steps for Scalping Forex

An Incredibly Easy 1-Minute Forex Scalping Strategy (The 3-EMA Trading System) - YouTube

To scalp Forex, you should follow the simple steps outlined below:

  • Click the link here to register a live account with CMC Markets (You’ll be permitted to start with a demo account so that you can first learn how scalping is done. Notably, the demo account has to be funded with a virtual amount in the sum of £10,000)
  • Subsequently, you’ll have to make a choice of Forex pair from CMC Market’s pool of 330+ currency pairs
  • In scalping, you have to be certain about whether to buy or sell. Also, you’ll have to make a choice of entry and exit points
  • Make good use of risk management tools. One great way you can do this is capitalizing on stop-loss orders. In the event that you’ll try a risky scalping method, you need a risk management control to save yourself unfavorable circumstances that could mar your trading
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When Should You Scalp Forex?

If you’re very keen to make success with Forex scalping, you must pay attention to the best time for scalping. Expert traders have described the initial hours of the New York trading session as the best time for trading in major currency pairs. Particularly, the just-specified period is the best time for amateurish traders to scalp Forex.

Specifically, experienced investors may opt to trade at the time the market experiences maximum volatility. While this (time) is described as early morning, it could be very risky to trade at such time.

The currency you’re trading in does not have to necessarily determine the best time for Forex scalping. However, mid-morning has been described as the best time to trade a GBP-based currency pair. Whichever way, you should bear in mind that the initial hours of the New York trading session is considered the most effective period for trading in major currency pairs.

Automated Forex Scalping: What Does It Mean?

Automated Forex scalping is a kind of trading mechanism that paves the way for expeditious trades. In the light of the fact that Forex scalping demands swiftness, many Forex scalpers tend to leverage on automated scalping for the efficient trading they desire.

There are trading platforms equipped with algorithmic trading through which automated trading can be achieved. A good example of a trading platform with automated trading is MetaTrader 4. You can sign up for a MetaTrader 4 account by clicking the link here.

Notably, algorithmic trading incorporates the use of self-regulating software for the identification of Forex scalping signals. Besides helping to monitor the price movements of a scalper’s selected Forex pair, the software is also capable of speedy entry (into) and exit from a trade.

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Risks Associated with Forex Scalping

Since the Forex market itself is one risky ecosystem, it isn’t a surprise that Forex scalping is associated with risks. One of such risks is the possibility of a scalper’s position to incur lots of losses. However, a shrewd scalper can save himself this risk by thinking very quickly about what should be done to minimize losses. He should also reflect on the effective strategy for ensuring that the profits of subsequent trades cancel out previously incurred losses.


Delayed entry into or exit from a trade is considered another scalping risk. In the case of late exit, a scalper is very likely to have lost capital before the exit. This is because it could be difficult for the scalper to quickly close an unfavorable trade when the market doesn’t seem to favor his open position.

Forex scalping risks can be minimized and even avoided. This is why a high degree of concentration is required on the part of the scalper. A very attentive scalper with the right personality stands a great chance of avoiding losses by identifying unfavorable situations quickly enough.


Some Tips for Successful Forex Scalping

Consideration of maximum volume and liquidity levels for currency pairs –It is very essential to be watchful of when volume and liquidity peak particularly in trading currency pairs. Forex scalping requires the trader to enter and exit the market very speedily. And for the trader to meet up with the required speed level, it behooves him to trade currency pairs only when volume and liquidity are peaking simultaneously.

Scalp patiently –There is no need stressing that many Forex scalpers are known for scalping impatiently. While this indicates a risky trading habit, it is a likely recipe for unsuccessful scalping. To ensure you aren’t taking the risky scalping route, it behooves you to maintain a good deal of concentration. Scalping, on the one hand, requires the ability to decide very quickly and on the other hand, it demands patience and the ability to analyze smartly.

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Dealing with only one currency pair at any given time –Rather than trade many positions simultaneously, traders should zero in attention only on one position or currency pair. This way, the odds for the traders to make success with scalping will be great.

Frankly, concentration is considerably required in Forex scalping and when traders decide to trade several positions at once, they are very likely to lose concentration. Loss of concentration could be due to the fact that trading many positions simultaneously can prevent traders from paying adequate attention to technical charts.


Conclusion

We hope this post has successfully walked you through the steps for Forex scalping. Meanwhile, you should note that Forex scalping is not a recommended trading strategy for amateurs. If you must engage in it, you have to be very sure of your capability as well as your level of concentration.

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