Scalping Methodology, Tricks and Tips
Scalping strategy users require high concentrations, also require a good understanding of trading, equipped with analytical skills.
Scalping Forex is a term that is already popular among traders. This technique is known by opening and closing a trading position or position within a very short time span, also known as the ” look profit, direct brush “.
There is a presumption that the Scalping method is considered safe, so this technique is very familiar to market participants. In theory, the scalpers play at low time frames and hold their positions in a very short time compared to non-scalper traders. Thus, observations on overall market conditions are very limited, and risks arising from market price movements can be reduced.
However, the scalping method is not always beneficial, although it is also not always harmful. This returns to the character of each trader.
The profit generated from each trading position by Scalping method is usually small, but when summed for all closed trading positions, then the amount of profit can be quite large as well. Scalpers always avoid taking big risks. They abstain from trading with a single hit to generate large profits, but trading with high frequency and small profits, but safe. Thus, a scalper needs patience, and must be diligent in pursing the market price movements to gain profit as often as possible . For people with a serious analyst character to expect results that are always spectacular in tradingnya, it will be disappointed and frustrated when applying this way.
Scalpers need high concentration, monitor prices and make decisions very quickly. Also requires a good understanding of trading equipped with analytical skills.
Scalping involves a high risk . Many beginners have common problems when trading; they tend to try to maximize the benefits of transactions by risking the entire capital at once. Then you should not do that. Maximizing profit must be in line with maximizing risk. The size of the open position must be calculated very accurately, so that your entire account will not be used up in one transaction.
To fully understand how trading scalping, consider this: hard work and small profits accumulate over a period of time, can easily be exhausted with one big loss (because it does not limit losses). Finding a balance between profit and loss levels is the most difficult thing for scalpers .
Learn from Paul Rotter
In 2003, a broker in London noted that one of his customers had booked the highest trading volume for 8 consecutive years. He is Paul Rotter , a successful trader with an average trading lot of 3 million every month, and managed to book 65-78 million dollars in each year.
Paul Rotter is one of the successful scalping traders on this earth. Paul Rotter’s trading success began when he and Kinski (one of his close friends) opened the Greenhouse, a financial firm. From an initial capital of $ 526,000, in three months later Greenhouse had booked a profit of $ 6.5 million.
All traders can try to tread the success of Paul Rotter, and here’s a full-length Paul Rotter interview with one of the traders magazines:
Q: What Moment leads you to jump in the trading world?
A: I started by following a trading contest . At that time I was still in school.
Q: How can you become a professional?
A: At that time I worked in one of the Japanese banks, and I met one of the Chief Traders at the bank. He managed to book a constant profit and I had a lot of discussions with him about the psychology of the market.
Q: During your professional career, do you continue to be a scalper, or have you ever tried other strategies?
A: I always become a scalper, but I set my trading frequency according to the volatility that occurs in the market.
Q: How many hours a day do you spend in front of your computer when trading?
A: Usually about 5 hours, but when there are big market events it can be up to 11 hours.
Q: How many time frame charts do you use?
A: I usually use a timeframe between 5 to 30 minutes. Using the trendline and Commodity Channel Index (CCI) indicators to observe the volatility that occurs in the market.
Q: How long do you usually open a trading position?
A: I usually open positions in turns in minutes, at most in a matter of hours.
Q: What do you do when the price moves against your open trading position? Do you use Stop Loss ?
A: I will immediately look for the cause and close the position if the market moves against me.
Q: Why do you have no problem in closing open positions, even by taking the opposite position? Should not a trader have to stick to his opinion?
A: No, you are wrong. An analyst or a trading guru is the one who must hold fast to his opinion. A trader should not have an opinion; the stronger the opinion you have, the harder it will be to get out of the position of loss .
Q: With your Scalping trading style, what kind of Risk Management do you apply?
A: I make daily targets, either for profit or loss. What is very important is how much loss I can hold.
Q: How do you deal with emotional factors and disruptive thoughts when trading?
A: As the situation gets worse, I go to the bathroom and water my body with cold water or jump into the cold pool … hahaha.
Q: What do you do when you take a break from trading?
A: I used to exercise and usually go to a place for sightseeing.
Q: What do you prepare before the day-to-day trading? Do you have a specific routine?
A: Before the market opened, I read all the economic reports that would come out, the speeches of the central bankers if any, then I tried to make important price levels in the market that I would like to trade. I made an analysis myself and read analyst comments in the media to get a picture of the market and important levels in it.
Scalping Tricks and Tips
There are some important things about scalping techniques that are used, using graphs at 30 minute time frames to estimate trend movements, and using 5 minute time frames to open or close positions . To support scalping techniques, generally use indicators such as Fibonacci , trend line, and CCI.
Trading time is usually ahead of European market opening and American (around 20:00 s / d 22:00 GMT). At that time, the trading volume that occurs in the forex market is quite large. Arrange plans to achieve daily profit targets, and do not get caught for excessive trading.
If you experience loss when trading using scalping techniques, then don’t even think about repaying your losses immediately. There will be a tomorrow where you can go back to using scalping trading techniques.