Get closer to the Scalping Trading Style
Scalping does not always match everyone’s trading style. Traders who do scalping are often called scalpers and their mindset goes against the minds of most traders. This “Let the profit runs” mindset does not apply to scalpers who are more concerned with small profits but many will be successful if the ratio of the number of trading profits is greater than the number of losers traded.
A pure scalper will perform a number of trading positions in a day, between 10 to one hundred trades a day. Most scalpers usually use 1 minute charts. Because using a graph with a small timeframe then the scalper must do a strict setup especially its exit strategy. Instant order execution type from the broker (without re-quote) is crucial for the scalper so that the type of broker that has direct access to the price is the main weapon of the scalper.
While traders who want to do scalper with other timeframe (bigger) can use additional technique approach. The most obvious technique used is scalping when the market is locked in a narrow range. When there is no trend in the big timeframe graph, then move on to see smaller timeframes for scalping.
Another way of scalping using big timeframes is through the concept of “umbrella”. This concept can be done in the following ways:
- You open a major trading position using a large timeframe.
- As the main trading position goes, you perform the analysis and setup at a smaller timeframe in the direction of the main trading position. Sign in and Exit with the principle of scalping.
So practically any trading system, based on a good setup, can be used for scalping purposes. In this case, scalping is seen as a risk management method.
Basically every transaction can turn into scalping by specifying RRR (Reward Risk Ratio) at least 1: 1. This means that the amount of profit equivalent to the amount of loss poured in the trading plan (setup trading). For example setup, if you are going to trade BUY EURUSD at the 1.12000 level and place a stop at the level of 1.11950, the risk of 5 pips then the profit position will be liquidated if it has reached the level of 1.12050. Target is also 5 pips. This is called RRR 1: 1.