Forex Trading Strategies: Scalping Techniques
As the name suggests, scalping is a way of taking small profits at a regular interval by entering and exiting trading positions many times a day. It is unlike daytrading wherein a trader opens a position and closes in the current session; in scalping the trading frequency is higher than the daytrader’s trading frequency. Instead, a scalper tries to take smaller profits many times during the session. If you are a forex trader that is looking for new ways of making money in the forex market, it is a good idea to review the materials in the forex learn centre that is made available by easyMarkets.
As a point of comparison, the daytrader normally looks at a 5-minutes or 30-minutes chart to initiate a position, while scalper looks at 1-minute chart or tick charts to initiate a position. Scalping can be a profitable strategy, as these traders scalp between 5 pips and 10+ pips for each move in order to accumulate profits. For example, a scalper who is interested in 5 pips, initiates a high-volume trade and closes as soon as the initial targets are met. If the trade is profitable he makes $5 per trade on a forex mini account, and if the trader can repeat these profitable moves 100 times a day then he makes a nice gain of $500 in a session.
Before yourself as a scalper, you must bear in mind the following important points:
Scalping can be profitable at the same time very risky too. Hence, scalping must be handled with care.