One of the techniques and strategies currently on the rise in forex trading is the forex scalping strategy. Traders seem to be 'hypnotized' by this term, so this scalping strategy suddenly becomes a popular forex strategy.
There is something you need to know; although a scalping strategy looks like an easy way to make small profits in a matter of minutes, the fact is it's not that easy. Even though scalping is known to give fast results in forex trading, this forex strategy can only give you results if you can make the right decisions in a short time.
That if only you are not bothered by an internet connection in Indonesia which is known for frequent 'intermittent', or widening spreads, or re-quotes due to volatile prices - while internet connection is not supported.
Scalping is like a computer game that relies on the speed of the eyes and hands. For example, a car racing game, where you have to be able to make decisions at a critical time in no time, or your car will slip off course. It looks fun at first glance, but your money is at stake.
Knowing more about Forex Scalping Strategy
In forex trading, scalping is a strategy in which the trader tries to 'pick up' small profits in a row. A trader will enter and exit the market several times a day trying to make a profit among volatile market movements. This strategy is quite popular in the best forex broker.
Scalpers will usually react quickly when there is a release of economic data or other news that has a big impact on market movements. Even though it looks similar to day trading, it's actually not the same. In day trading, a trader will only open a position once or twice and the position will be closed before the trading day ends.
They never, or very rarely, let the position experience overnight. Meanwhile, someone who practices forex scalping strategy can open and close more positions and only aim for small profits every time he opens a position. If day traders use the 15 minutes to 1-hour chart, the scalper uses the 1-minute chart.
Day traders usually target a profit of $ 200 to $ 500 each time they open a position, while scalpers usually only target $ 5- $ 10 per transaction. If he makes 10 profitable transactions, he will be able to book a profit of $ 50- $ 100 per day.
Of course, that amount could only be earned if all the transactions he made ended up being profitable. Sometimes a single transaction that loses money can actually wipe out the profits from the previous nine transactions.
Scalping should be Done Carefully and not Emotionally
Forex scalping strategy requires very high consistency and concentration. You have to be ready in front of the computer to monitor market activity and react lightning fast to every opportunity.
In scalping trading, you have to be able to sit for hours in front of the monitor, and must be able to make decisions in a short time. If your attention is distracted for just a moment, then you will miss the opportunity, or you will suffer a painful loss.
So as a scalper, you must be able to quickly get out of the market as quickly as you enter using a variety of forex trading methods. For that, you absolutely have a reliable internet connection. Imagine if you couldn't close your losing position because the internet connection was lost. Learn more about how to use this strategy in Didimax forex broker.
You also have to be able to deal with stress levels that are higher than day trading. You should think again before deciding to apply a forex scalping strategy if you are still too emotional in making decision.
