Many traders like to use the scalping strategy in forex. The strategy of this model involves a series of short-term daily transactions and earning a small income from a single transaction.
And the total daily profit is formed by a large number of transactions sometimes up to hundreds of trades. In general, the trading time of this model lasts from a few seconds to several minutes.
Scalping is the most profitable trading method. However, this model trader must have a high understanding of many factors, ranging from the instruments used, market expectations, news, and statistical background, as well as high concentration and discipline.
It takes a certain experience and technique to apply this trading model. However, in the application of scalping strategy in forex, some argue that it is better for beginners to apply this strategy model, because it does not require technical and fundamental analysis of the global market and its application can be a good practice to gain experience.
Others argue that scalping is a strategy that requires certain knowledge. At the same time, to decide whether a scalping strategy is suitable for you, you need to know its advantages and disadvantages.
Advantages of Scalping Strategy in Forex
One of the benefits of using this strategy model is to generate profits in a short time. For example, you open at 15,500, and after a few minutes close at 15,520.
So, in a few minutes, you earn $ 20. Considering there may be trades in several tens of positions, the amount earned will be very large.
The second advantage is fast trading. The use of long-term trading requires a thorough fundamental analysis of the market and a study of its main factors.
When trading in the short term, you can use small market patterns and technical analysis. The use of scalping allows you to make good profits with a minimum deposit.
Earning $100 from 10 to 20% per month will not greatly improve your financial situation, and 20% daily can significantly replenish your budget. With a scalping strategy in forex, you don't have to worry or hesitate because you think about floating positions.
For some people, this position is something that may be quite annoying and often makes us anxious, especially if we do not understand the market conditions and where the price will move.
Because when the position you take floats, you only have two choices between being left alone with full of anxiety, or doing a cut-loss.
Disadvantages of Scalping Strategy
The main drawback of this strategy model is the high risk. Making big and fast profits is always risky because determining the direction of the trend on short time frames is sometimes unpredictable.
Most of the best forex broker do not accept this strategy model. Of course, no one outright prohibits their use, but many forex brokers set a time limit for transactions or the number of transactions per session.
Some brokers limit the duration of profitable operations to 10-15 minutes. Since this model of trader makes tens to several hundred transactions per day, it takes a lot of time to be in front of the computer.
For short-term implementation, you need to use leverage. Therefore, one or two failed transactions can significantly affect the deposit.
The strategy of this model can be used not as the main strategy, but as an additional strategy, that is, you can trade in long-term positions where prices are stable, and at the same time use scalping and make short-term profits.
To increase your knowledge, it's a good idea to join the Didimax forex broker, because in addition to the demo account facility, you can also get free education to learn various interesting things about forex.
In every trade, it takes the right strategy so that you can get a profit. Especially if you are a beginner, don't just apply a strategy that you don't understand. The scalping strategy in forex may be a good option for you if you master it well.
