Forex Scalping method involves quick opening of positions and then quick liquidation too. There is no one value for “quick” here but usually it means time of up to 3 to 5 minutes in this case. However, most of the scalpers will maintain this time to just one minute.
This method of Forex Scalping gained popularity as trading style because of its apparent safety. There is a dispute from many traders who say that when scalpers keep their positions for a very short time as compared to normal traders, scalper time for market exposure is much lesser than it is for trend followers and/or day traders. As a result, the risk of getting affected greatly by strong market changes is reduced.
Should you use Forex Scalping
Please note that not every trader can work effectively using forex scalping. The profits that scalper made by every opened position is nominal. However, if profits from all such small opened positions are accumulated it’s a great amount. There is lesser risk taking in scalping which is safe but it also means that scalpers will be missing some great opportunities of profit; they will just rely on small frequent safe gains.
Thus, patience and devotion is a requirement for scalpers. A scalper must work with full devotion and wait to get profits from his small trades. Moreover, traders who are too much excited to get huge profits as soon as possible and think of making more profits for every trader will just get disappointment and frustration in this method.
You must stay attentive in this method
Yes, this method involves much more attention as compared to other trading methods like trend following and swing trading. In scalping, a trader may open positions and close them several times. This number can go up to hundreds of times. And as each of these small trades cannot result in huge loss scalpers may not be careful for each individual trader. Thus, scalper can choose which positions to care more for and which to care less for.
Scalping may seem difficult method in start but it can be attractive and even fun when trader knows well about it and gets comfortable in its usage. But it is really a necessity that scalpers must pay attention and concentrate in order to be successful.
Automated Trading Systems
Scalping can be tough for part-time traders as they cannot give full attention and time to this method. Most of the traders keep trading as second income source and are not willing to spend too much time on it daily. To solve this problem, the concept of automated trading systems has emerged which are available for usage on many online websites. It is advisable not to rely on these systems as they really would not work well for you and in end you will just realize not to trust words of others after losing your money.
On the other hand, there is a safe solution in this which is to design your automated system for yourself. This will require a good guidance from somebody who has experience and some devotion and practice from you. However, the result will help you save time you have to spend on trading and still use the scalping method. You can design your automated system to be semi automatic, designing to carry out systematic tasks (e.g. stop-loss, take –profit orders) and carry analytical tasks yourself.
Some Useful Information about trade sizes in Forex scalping
Scalpers should try to keep consistency in their chosen trade sizes in their preferred method. In scalping, it is very easy to lose money if you start trading in random trader sizes. This is because this increases the chances that one such randomly chosen trade size may end up in big loss annulling the previous small profits. The worse can be losing all money you earned in a day or days. Therefore, scalper must use a good strategy and give his devotion, patience and choose constant trade sizes. This is the beginning of the scalping but yes, if the beginning proves to be good potential profits will increase and potential losses will decrease.