Forex Scalping

What does the concept of "scalping forex" mean? Speaking about it in general terms is a style of trading in the Forex currency market, which is based on the principle of generating income from numerous transactions that take place within a very short time.

Beginning traders in their trade quite often use different scalping strategies. Forex is a very dynamic market, reacting to various economic news, events and many other factors. Therefore, opening a position for a long period assumes that the trader has certain knowledge. Forex scalping makes it possible to earn money in the foreign exchange market even to those traders who only recently decided to trade Forex.

Unlike complex rules that suggest using some Forex strategies, scalping involves the rapid execution of trading operations on charts with a timeframe in one or five minutes. Closing of the order occurs immediately after the amount of profit has covered the size of the spread and arranges the trader. Since his income is often expressed in points or, as they are also called, pips, then scalping on Forex has received an alternative name - pipsing (catching pips, pips).

A characteristic feature of scalping is, first of all, in a large number of transactions within one day. The number of trading operations can vary from 30 to 1,000 pieces. In order for the trade to be successful, the great importance of leverage is required. Most scalpers work with a leverage of 1: 200 to 1: 600. For example, the leverage of 1: 500 allows you to conclude a deal with a volume of 0.1 lot, having only 20 USD on the deposit.

It is worth noting that professional traders consider scalping on Forex as an unattractive strategy, because for many of them it is associated with the absence of a specific trading strategy, high risk and high psychological burden. In this statement, of course, there is some truth. But, nevertheless, at the current moment, many different trading systems have been developed for different currency quotations and time periods, the basis for which is scalping. All of them work on the same principle: "To be in time to get your income."

An important factor for successful trading with scalping is the broker's trading environment. We are talking about such parameters as the time of execution of the order and the size of the spread. For example, a broker LiteForex has a spread of EUR / USD of 3 points, and four symbols after the decimal point (1.3628) are used to reflect the value of the currency. A broker Alpari offers five decimal places (1.36282) and a spread of about 1.8 points, which makes it possible to increase the profitability of transactions. Therefore, when choosing a broker , you should carefully familiarize yourself with its technical parameters.

As an example of the scalping strategy of Forex, consider the following trading system. This system is based on the use of a system of 3 screens and does not require knowledge of indicators. Despite its simplicity, it allows you to make very good profitable operations. Correct risk management and strict adherence to the rules allows you to achieve good results on Forex. This system is multicurrency and allows you to work with any quotation. It can be described with just three rules:

• open in Metatrader for the same currency quote simultaneously 4 windows with such timeframes: H1, M30, M15 and M5;

• if in each window the last closed candle has a white or green color, then the position for the purchase is opened;

• If in each window the last closed candle has a black or red color, then the position for sale is opened.

Like any trading system, scalping has its drawbacks. These include the need for constant control over the dynamics of prices and constant tension. However, statistics say that for most novice investors this system is the first one they apply in practice.