Forex Scalping: What is Scalping, Strategies and the Best Indicators


Forex Decalping strategies are very popular among beginner traders. Trading frequently (holding a position for a very short time and closing it out with a small profit) allows you to make fast real-time profits and avoid swap fees. Scalping training on a demo account helps a beginner to improve his reactions and learn to intuitively understand the behavior of traders in financial markets. However, it is better to enter into actual transactions over longer time periods.

Forex Scalping: What is Scalping, Strategies and the Best Indicators

What is scalping? Definition of scalping operations

Scalping is a high-frequency trading strategy used to make a profit from a large number of transactions in a short period of time. A scalper is the name given to a trader who uses such strategies and performs a large number of transactions during the day.

For traders who are just starting to trade, this scalping strategy is considered quite risky, because the trends on short-term charts are very complex (this is called the price noise effect) and therefore it is difficult to predict correctly. On the contrary, I believe that a beginner should receive scalping training before starting to learn medium- and long-term trading strategies. Scalping helps a person to improve their attention and reaction speed; it visually shows the problems of slipping. Although you need to have great concentration and be emotionally balanced when using scalping, if you have understood the theory, scalping forex strategy is an excellent simulator for practicing these skills.

Everything we need to know about scalping

Forex scalping is one of the high-frequency scalping techniques, which means that a large number of orders are closed with small profits.
Investment vehicles with the highest liquidity and volatility are the most frequently scalped vehicles.
Scalping does not mean that positions are moved to the next trading day, and therefore there are no swap costs.
Day trader scalpers do not have to use technical analysis: they capture price movements regardless of direction. Every second is important here because the price can reverse at any moment. Therefore, scalpers do not have time to open indicators and analyze them. The only tool they have is the ability to make transactions with one click.
Scalping requires you to be disciplined. If the transactions go into loss, the scalper takes a Dec.
Manual operations are replaced by automatic operations. Since the constant workload reduces the attention and caution of processors, it is recommended to develop a specific strategy for manual operations, and then develop an EA.

How to Do Scalping in Forex

The main rules of scalping:

Trade only with high liquidity instruments with the largest trading volumes and the narrowest spreads
There is a perfect period for every investment vehicle. For example, European currencies are traded the most in the European session, while the Asian session is the best for Japanese yen transactions. Do not make scalping transactions an hour or two before and after weekends or holidays: trading volumes are at their lowest during these times.
The best investment tools for scalp are major currency pairs. Gold, oil and stocks are more rarely used for scalping. Cryptocurrencies are only good for scalping during important statements, as they will not be enough to cover spreads with daily volatility of 1-2%.
Do not keep positions open for longer than necessary. If a position goes into loss, close it immediately. Then open a position in the opposite direction or take a Dec.
The best time for Forex scalping and opening positions is: for fundamental analysis – based on newsletters; for technical analysis – trading based on key support and resistance levels.

Like it? Share with your friends!



Your email address will not be published. Required fields are marked *