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How to scalp the forex market
Written by: PaxForex analytics dept - Saturday, 17 September 2016 0 comments
There are many ways to trade forex effectively. The diversity is so great that there is no wrong way to trade- there is only profitable and not profitable. Forex scalping is a popular trading strategy involving the fast execution and liquidation of opening and closing of forex orders to maximize day trading market movements. These types of trades are usually only held onto for a few seconds to a few minutes at the most.
Scalping is something that requires a great deal of skill because you need to get in and out of positions relatively quickly, and you obviously need to attempt to make a profit from every trade that you make, whether it’s based purely on price action or if you are trading off the short-term charts such as the 1-minute and 5-minute charts. You will find that this is one of the quickest ways to make money as a forex trader because you can open and close a position in a matter of minutes (or seconds in some cases).
Scalping is very fast paced. If you like the action and like to focus on one or two minute charts, then scalping may be for you. Setting up to be a scalper requires that you have very good, reliable access to the forex market makers with a platform that allows for very fast buying or selling. Usually the platform will have a buy button and a sell button for each of the currency pairs, so that all the
trader has to do is hit the appropriate button to either enter or exit a position. In liquid markets, the execution can take place in a fraction of a second.
Not every trading system is going to be appropriate for every trader. There are some key qualities that a good scalper must possess. One must be calm under pressure and able to make snap decisions with good judgment. Scalping requires that you operate faster than the speeding bullet, too much time cannot be wasted on thinking about the trade otherwise the opportunity will disappear just as quickly as it appeared. Much of the thought that goes into a trade can be eliminated by developing a quality Trading Plan. Even so, the trader's decision making ability is going to play a major role in successful scalping.
Many forex traders are trying to make a living out of their activities and many novice traders are hoping to make decent amounts of money in scalping. Whilst it is possible, what you have to understand is that scalping takes a lot of time and even though you may make substantial pips, it takes some time to build up. It may be better to employ forex trading scalping as a good way to jump start your forex trading career. With scalping you can get a good overview of the technical indicators, learn how to make fast decisions and quickly interpret exit and entry signals.