About Forex Scalping

  • September 2014
  • Posted By Ninoslav
  • 0 Comments

Forex scalping is all about taking advantage of the forex market’s volatile currency pair changes, especially the changes that often happen over short periods of time. Due to the nature of these changes, most forex scalpers take the opportunity to ‘trade within minutes,’ as most trades often last less than five minutes on a typical forex scalping run.

 

The act of forex scalping is actually considered dangerous for novice traders, as it does require more forex know-how to effectively take advantage of the strategy. For seasoned traders that can handle forex scalping, however, it’s probably one of the more exciting forex trading strategies out there.

 

Forex scalping tips… and some tricks

 

A lot of expert forex scalpers might jump right in and say that it’s best to ‘use incredible high leverage’ to boost small accounts into highly valued ones in a short amount of time. There’s a problem with that strategy, though.

 

To start, even though high leverage can mean big profits, it also means big losses. So, starting that high will make sure that you have a ‘long drop down,’ particularly when it comes to eating those sudden losses.

 

That situation is the main reason why a lot of other forex scalping experts suggest that forex scalpers start at reasonable leverage thresholds, something around 20:1 or 50:1. After you’ve managed to have some success with forex scalping, it’s suggested to continue raising the bar for what you can accomplish.

 

Of course, if you’re a daredevil anyway, you can always go ahead and trade with high leverage thresholds. When you do this, you should always have a tighter stop loss order to go, though. This will essentially stop bad orders from completely depreciating your account when you least expect it.

 

Another important forex scalping tip to know is that the time you trade does matter. The four major markets – New York, London, Sydney and Tokyo – are all open and hit their peak times at, well, different times of the day.

 

Due to that, you need to know when each market hits their peak times and when your selected currency pairs have the most activity. This information can essentially help you learn when and how your currency pairs’ price movements behave during certain hours.

 

And, don’t forget that forex scalping harbors an incredible amount of risk. Forex scalping opens up opportunities to earn bigger profits, though those same profits often end up hurting traders more in the end, thanks to the losses.

 

Ultimately, as a forex trading strategy, forex scalping is a way to trade that shouldn’t be taken lightly, requiring seasoned traders to make the right decisions despite the short trading times.

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