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Is Forex Scalping Right For You?
Written by: PaxForex analytics dept - Tuesday, 29 November 2016 0 comments
When it comes to forex, scalping generally refers to making a large number of trades that produce small profits individually. Scalping in the forex market involves trading currencies based on a set of real-time analysis. The purpose of scalping is to make a profit by buying or selling currencies and holding the position for a very short time and closing it for a small profit. These types of trades are usually only held onto for a few seconds to a few minutes at the most.
The main objective for forex scalpers is to grab very small amounts of pips as many times as they can throughout the busiest times of the day. Because scalpers basically have to be glued to the charts, it is best suited for those who can spend several hours of undivided attention to their trading. It requires intense focus and quick thinking to be successful. Whereas a day trader may look to take a position once or twice, or even a few times a day, scalpers are much more frenetic and try to skim really small profits multiple times in a session.
Scalpers look to enter the market, and preferably exit positions prior to the market close. Normally scalpers
employ technical trading strategies utilizing short term support and resistance levels for entries. While normally fundamentals don’t factor into a scalpers trading plan, it is important to keep an eye on the economic calendar to see when news may increase the market’s volatility.
There are always risks associated with trading. Whether you are a short term, long term, or any kind of trader in between any time you open a position you should work on managing your risk. This is especially true for scalpers. If the market moves against you suddenly due to news or another factor, you need to have a plan of action for limiting your losses.
It is important to note though, that the forex scalpers usually require a larger deposit to be able to handle the amount leverage they must take on to make the short and small trades worthwhile. In fact, it is really ideal only for those who are naturally scalpers at heart. If you enjoy the adrenaline of starting trades constantly and managing them quickly then scalping is for you. But if it seems too high intensity as a trading strategy, it isn't likely to go well.