What is Forex Scalping?
Forex scalping is basically a trading strategy for currency which is done on very short times – For example: 1 to 5 minute charts.
A forex scalper will perform many quick buy and sell transaction that will extract as little as 2 pips from the session. The very quick transactions are usually done with very large lot sizes so that the small amount of pips which have been scalped will lead to a good profit margin.
Forex scalpers rarely hold any overnight trades. Forex scalpers tend to use forex trading charts on very small time frames. A forex scalpers purpose is to quickly spot a entry and exit opportunity.
The Benefits of Scalping
There is a potential for scalpers to make high profits quickly due to the fact they are risking more. By increasing the per pip value, with only a few pips they can close the trade with similar profit margins that a more conservative trader might obtain over a longer period of time.
A forex scalper tends mainly to look at the charts or technical analysis rather than looking to news events. One exception to this rule are what is known as Momentum Scalpers. A momentum scalper will generally take advantage of an immediate drastic response to a news announcement which causes a spike upwards or downwards within the first 10 minutes of the announcement.
The Pitfalls of Forex Scalping…
Forex Scalping is DEFINITELY NOT for the faint of heart. Scalping is a very risky strategy and means that traders should not walk away format heir computer whilst a live trade is open.
Related posts:
