How to Practice The Art of Forex Scalping

Published: 08th April 2015
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There are many ways to approach trading in the forex market, depending on the time horizon. One can indeed classify types of trading in three categories: day trading, which involves taking positions on a few hours a day, swing trading, which involves taking positions on some days, and scalping, which is to take multiple positions within a very short timeframe.

What is Exactly Forex Scalping?

Scalping involves taking multiple daily short-term operations, with a strong leverage and limited objective earnings, highly leveraged offsetting weakness in terms of pip gains with a target to achieve substantial financial gains.

There are not really any rules and it depends on the mood of the day and the state of mind of the trader, but we can estimate a scalper passes between 20 and 100 operations per day, each lasting a few seconds to a few minutes, for purposes of gain from 5 to 15 pips.

This can be a stressful and exhausting activity and requires staying glued to your forex trading platform all throughout the day.

Where Does the Scalper Base his Decisions?

We believe that scalping the forex is a "trading experience." The short-term transactions and instant response required at the position makes the delicate analysis: We really do not have time to analyze the market in a conventional manner.

Scalpers can use technical analysis indicators; I believe that the main indicators are poorly adapted on such short time horizons. Indeed, the signals are often slightly delayed, or slightly advanced.

So, it's about the experience and the instinct on what the scalper primarily basis his actions. A scalper doesn't know what to do with the general trend, or the macroeconomic environment of the moment. He is interested in the economic calendar and the events that can generate volatility which he can enjoy, but does not practice the economic and psychological analysis.

What are the Qualities of a Scalper?

The first quality of a scalper is his experience. Indeed, he needs to act fast, performing a rapid technical analysis that needs to be done by instinctively and without much thought. A scalper should perfectly master the technical indicators that he could potentially use.

Here we can make a point about the "instinct of the trader," the "feeling." I believe it is not an innate quality, but a quality that comes with experience. It is a force to analyze the market, reactions and practice technical analysis that a trader unconsciously incorporates the sum of its findings, its successes and its failures.

As time passes and things get better, the trader thinks he developed an instinct, but he is nothing, he just unconsciously applies the sum of his experiences, so do not play by the "pure instinct" but simply "instinctive analysis."

The second quality of a scalper is the mastery of his emotions. This will indeed be when we pass dozens or even hundreds of transactions per day, it is inevitably subjected to intense stress and an untold number of opportunities to get overwhelmed by emotions.

To conclude we need to mention that scalping can indeed look very attractive. The adrenaline, the opportunity to make significant and rapid gains, the prospect of practicing "real trading" as described in the collective imagination. However, beginners should not be allowed to play, and even consider Scalping as a possible goal, unless they have obtained the necessary skills and experience.


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