Did you hear about Forex Scalping trading style? Today, we discuss who the scalpers are in Forex market and whether using Scalping Forex strategies suits every trader.
AtoZForex – Scalping in Forex refer to a trading style, which is usually very short-term oriented. Moreover, a big number of professional traders utilize this technique. As a fact, scalping is the shortest term style, when it comes to trading in Forex. The name of the style suggests that the trader is attempting to make many small profits during the trading day.
The name of the style might be quite confusing when you hear it first time. However, in reality, it suggests that the trader is attempting to make many small profits during the trading day.
Using Scalping Forex Strategies
Traders, who are using scalping trading style, are called scalpers. They are normally utilizing technical analysis in their trading routines. Additionally, we can differentiate between system and discretionary scalpers.
System scalpers are just following scalping system with no decisions being made from an individual point of view. On the other hand, discretionary scalpers are making trading decisions very quickly in real time. Following on this, scalpers mainly utilize the market prices to make their own trading decisions. Yet, some of the scalping traders use one or few technical indicators for analytical purposes.
Below, we will talk about scalping trading style in details. We will cover the timeframes, techniques, and psychology of scalpers. Moreover, in the end, you will be able to answer the question: can scalping become your trading style?
Scalping Forex Strategies: Timeframes
Scalping style implies using the shortest chart timeframes and the time of the trading activity. For instance, a day trader may utilize a five-minute chart, while making five trades on average, with every trade being active for half an hour. On the contrary, a scalper would use a five-second chart, where each bar stands for five seconds of trading). He/she would make twenty or thirty trades per day, with each trade being active for only two minutes.
On the contrary, a scalper would use a five-second chart, where each bar stands for five seconds of trading. He/she would make twenty or thirty trades per day, with each trade being active for only two minutes.
Scalping trading techniques
There exists a number of scalping techniques. One of the most popular scalping techniques is to use the market time and sales to decide where and when to enter trades. When scalpers use the time and sales, such technique called tape reading, since the time and sales are known as the tape.
Other scalping techniques are somewhat similar to other trading styles, as they also utilize bars or candlestick charts. Moreover, in other scalping techniques, traders also determine the placement of the trades using price patterns, technical indicator signals, and support and resistance.
Using Scalping Forex Strategies: Scalper Psychology
Scalping would perfectly suit for a specific type of trading personality. Scalping traders ought to be very disciplined, especially if they are system scalpers. In case with system scalping, it is very important to be able to follow the trading system precisely with no exceptions.
Moreover, scalpers should have an ability to make a decision with no hesitation. Yet, they also need to be flexible enough to understand when the trade is not going as expected and act fast.
Does Using Scalping Forex Strategies suits you?
In case you are a trader that uses daily charts and makes the trading decision over the period of the entire evening, it is possible that you won’t make a good scalper. Yet, if you prefer to act quick and precise, the scalping might fit into your trading routine very successfully.
Moreover, scalping technique may be very appealing, as the trader is able to make an entire day’s profit in just some minutes. However, this is a false impression. In reality, scalping can be very difficult, since there is almost no room for error.
In case you decide to give scalping a try, make sure that you do so in the simulation until you will be able to achieve consistent profits. Moreover, you need to make sure you are not making any beginner-stage mistakes.
What is your opinion about Using Scalping Forex Strategies? Think we missed something? Let us know in the comments section below.