Scalpers in Forex hold market positions for very a short time, maximum 15 min & trade many times in a day for small profit each time of trade.
These are the guys who spend most of their time in front of their trading gadgets e.g. Computers, phones looking for setup signals to trade.
With scalping, you hold a trade for a few minutes and then close it making small profits.
What is forex scalping
Forex scalping is a trading method, where a trader focuses to taking as many trades with small movement to grab very small profits.
Scalpers in forex hold on to trades for a few seconds to a few minutes.
They sit in front of the computer all day. Their aim is to grab very small gains at the busiest times of the day.
They mostly trade when the market is most liquid.
Smaller moves happen more frequently in the market, so scalping traders aim at taking advantage of the common small movements in the market throughout the day.
1 – Minute Chart Forex Scalping Strategy with Candlestick Patterns
Because scalping generates very few pips/ small gains, a trader has to stay in front of the computer for long, almost all day.
You have to trade as many times as you can to get a substantial profits when added up.
Also, to benefit from scalping, you have to use a larger position size in high volume markets.
So, what makes you scalpers in forex?
- If you don’t mind spending most of your time in front of your computer looking for short-term signals.
- Taking many trades several times in a day with each position lasting for a few seconds or minutes.
- You are most active during the busiest hours of the Forex market.
- If you find it hard to wait for a trade that runs for more than an hour.
- You like intervening your trades when already running, you can’t wait for a long time.
In case, you are planning to become a scalper, these are rules you should not forget:
What you should consider to do forex scalping
Trade currency pairs with minimal spreads
The fact that scalping requires you to open and close trade positions several times, you have to choose to trade currencies with minimal spreads.
These are mostly from large market economies. They are stable and more liquid.
They include; EUR/USD, GBP/USD, USD/JPY,USD/CHF.
Avoid trading during the major economic news announcements
You should avoid trading during major news announcements; They cause emotions in the market leading to huge swings.
The major news announcements are likely to cause slippage due to high swing movements influenced by peoples’ emotions in the market.
Also during news release, some brokers tend to increase spreads.
As you target small movements you may get knocked out before the trade even moves to your preferred direction.
Always be alert when the news is coming on the market.
Trade when the market is most busy
Most signals appear during the busiest hours of the market especially when the market is overlapping from one session to another.
As scalpers in forex, you are likely to get more signals to trade because during this session the market is very active.
This is from 3 am to 4 am EST and from 8 am to 12 noon (EST)
Consider Trading with Leverage
Must use high leverage while trading due to the small size of the targeted profits.
Using high leverage can help you multiply your small profits quickly. Remember while scalping you are targeting a few pips.
For example for a standard lot the pip value is average $10, at a target of 10 pip you make $100. Five times a day you already have $ 500.
Scalping however, requires high degree of concentration for the whole session sitting in front of your computer figuring out viable setups.
You must make sure you are ready to spend your trading days in front of your desktop all the time, no blinking.
How long you can hold an open position in forex, is a personal thing for all traders. The decision is all yours. You know what your goals are as a trader, the kind of strategy you use to trade. All this starts from what you are? and What you want? If I am to answer,...
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