Forex Trading Strategy with Scalping
This technique is known by opening and closing an or a few trading positions in a very short period of time. This short period of time is relative, which surely scalper plays in a 1 minute and 5 minute time frame, and holds his position in just minutes.
Scalping method in forex trading is so popular along with the increasing number of retail traders involved. This technique is known by opening and closing an or a few trading positions in a very short period of time. This short period of time is relative, which surely scalper plays in a 1 minute and 5 minute time frame, and holds his position in just minutes.
Scalping is so popular because this method is considered the safest. Because a scalper plays at a low time frame and holds his position in a very short time compared to a non-scalper trader, observing the overall market conditions is very limited, and the risk arising from smaller market price movements. Basically true scalpers only care about the size of the spread, and pay less attention to the trending or sideways market conditions because it is not significant. Scalper is only looking at the price volatility level in a very short period of time.
Is the scalping method suitable for you?
Scalping method is not always suitable for all traders. The profit generated from each trading position is usually small, but if added to all trading positions that have been closed, the amount of profit can be quite large as well. The scalpers always shy away from taking big risks, they are abstinent trading with one gebrak generate big profit but trading with high frequency and small profit, but safe. Thus a scalper needs patience, and must be diligent in pursuing market price movements so that profits can be obtained as often as possible. For those who have a serious analyst character by expecting results that are always spectacular in trading, they will be disappointed and frustrated when applying this method.
Attention is very important for a scalper
Trading with scalping methods requires much greater attention than other trading methods such as swing trading or long-term trading (long term position trading). A pure scalper will be able to open and close 10 positions at once, even one day trading for more than a hundred positions. Because you do not want a single posisipun loss is large enough, a scalper can not help but be very careful and not reckless in opening or closing positions and determine the stop loss or target profit.
At first this way looks hard to run, but for a scalper who has been practicing this method for a long time it will feel comfortable and difficult to switch to other trading methods. For a scalper who wants to be successful the ability to focus and concentrate on his trading position is absolute. It is not an innate talent, but can be trained continuously with a serious commitment to become a true scalper.
Automatic trading system
For those who are not full-time traders, scalping methods can be very time-consuming. Those who trade forex just to find additional income for their permanent business certainly do not want to spend hours to practice forex scalping. To help those who are trading ‘odd’ and interested in scalping methods, some software companies have developed automated trading systems that have been widely advertised and sold at various leading forex sites.
Although we must be careful in choosing the type of software offered because not all the features claimed by the author is true, but the automated trading system software can be a useful option. Please note that the software is not full automatic but we must determine the level of stop loss and profit target level according to our analysis, it’s just that we do not need to linger and monitor our trading positions. By learning and trying out some of the features in the automated trading software, we can save a lot of time for trading, although for some experienced scalper, automated trading software is less suitable to use because besides the settings are rather complicated, the results are not as desired.
Lot size in scalping
Scalper must be consistent in using lot size or volume size when trading. Application of always different lot sizes at each position opening is very dangerous.Maybe you can apply this lot flexible method if you are not using the scalping method, or when you end the scalping method and trade in other ways. The principle of a scalping strategy is basically to cover losses with the profits earned, and if you use a lot size that is not fixed or random, sooner or later it will cause lameness in calculating the overall trading results.
So a scalper must often practice, be patient, attentive and concentrated when the trading position is still active, in addition to be consistent on the size of the lot or the amount of trading volume. In the next section will be discussed other aspects of scalping, among others, how the strategy to gain profit in scalping, currency pairs and time suitable for scalping and choose the right broker for scalping.