Forex scalping involves the rapid opening and liquidation of positions when trading on the Forex market. When the word "quick" is used, it is meant to mean a time period of 3 to 5 minutes maximum. Most scalpers usually take only about a minute to open and liquidate their positions in the Forex market.
Many traders like scalping because it is perceived as a safe way of trading. The argument behind Forex scalping as being a safe way to trade is that scalpers only hold their positions for short time periods as compared to regular traders. This leads to scalpers only being exposed to the market and its volatility for a very brief time period compared to trend followers and day traders. This translates into scalpers only suffering large losses on a very infrequent basis.
As scalpers are only exposed to market volatility for a very short period of time most will not even consider concepts such as ranges and trends. They are often only interested in the bid-ask spread, and that's only to recognize the short bouts of volatility that are created by these spreads.
It's important to note that scalping is not a strategy that will suit every trader on the Forex market. Scalping will only work for patient individuals who are willing to forego large profit opportunities for smaller but more consistent gains on the market. Those traders who want to make "big splashes" on the Forex market will be disappointed by the Forex scalping trading strategy.
Additionally, Forex scalpers need to be diligent and attentive to their trades. This is because most scalpers will close tens and even hundreds of positions in a single day. Scalpers cannot afford any major losses or risk really losing their investments in the market. They must be able to concentrate on all of their positions and be ready to act immediately as soon as the right opportunity presents itself. This is in order to make the Forex scalping strategy a profitable one.
As a result, scalping requires a trader to invest much of his/her time each day. Since most traders are not fond of this requirement for successful scalping, many companies have created automated trading systems to help cut down on the time needed to be successful at Forex scalping. However, many of these systems can lead to great losses for the trader. It is advised instead that the individual trader develop his/her own trading system using his/her methods of scalping. This can help cut down on the time that is needed to employ his/her scalping strategies to make consistent profits on the Forex market.
Paul Bryan is a respected currency trader who also operates: Forex Reviews
Article Source: http://ping.fm/wBrLl
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