Scalping - The most profitable trading strategy in forex

steven evans By steven evans, 16th Dec 2013 | Follow this author | RSS Feed | Short URL http://nut.bz/98q1sj8k/
Posted in Wikinut>Money>Forex Trading

what is scalping in forex trading and how to handle the risk while using this trading method.

What is scalping in forex trading?

Scalping is a trading style that is used by many traders to get high profit return within short periods of time. Usually scalpers only have small target from market movement, but they can earn high profit since they are using big lot size.

With using this trading style, the forex trader can get 1-10% profit within less than 1 hour. This kind of profit level is very high if it compared with intraday traders or swing traders and that’s the reason why this trading style being popular among forex trader all around the world.

The risk while scalping

Actually this style of trading also has a lot of disadvantages especially if we are talking about the risk. Since it offering very high profit return, the forex trader may facing big losses if their scalping failed and in the worst case, they may losing all of their deposit in forex. So this strategy will be like 2 edges of sword. If you are success then you will get high profit, but if it failed then you will need to redeposit if you still want to trade in your forex account.

Scalping is not recommended for newbies who just come into this business because their success rate will be smaller than experienced trader. It’s only for people who already know how to read market direction so they can do cut loss immediately when they think their prediction is wrong so they don’t need to losing all of their money.

Practice in demo account first

Before using scalping in real account, then it will be better to practice in demo account first. They can try about this trading style until they have high success rate to predict market trend. In demo account they don’t need to worry about anything. They won’t lose any single cents since its only virtual account. If they lose the forex balance while practice then they can create another demo account easily without spending anything.

Once you already confident with your trading result after practice about scalping in demo account, then you can try to do it in real account. If you ask me, then it will be better if you don’t use maximum lot size at once. Just use small lot size first and you can increase it when your forex balance increased. It will be safer for you to do that so you will not get stop out easily.

Tags

Forex Market, Forex Trading, Market, Scalp, Scalper, Scalping, Trade, Trader, Traders, Trades, Trading, Trading Method, Trading Strategy

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author avatar steven evans
just an ordinary man with an extra-ordinary mind.

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