Traders, especially those starting out are often looking for forex strategies that will extend the scope of the things they can do from their trading platform. Forex scalping is a trading strategy used by forex traders to buy a currency pair and then to hold it for a short period of time in an attempt to make a profit. A forex scalper looks to make a large number of trades and earn a small profit each time.
A forex scalper is considered anyone that takes one or more positions throughout a trading day. Normally these positions are based around short term market fluctuations as price gathers momentum during a particular trading 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.
Scalping is based on an assumption that most forex patterns will maintain the first stage of a movement that will move in the desired direction for a brief time, but where it goes from there is uncertain. Some of the forex trends will cease to advance and others will continue. A scalper intends to take as many small profits as possible, not allowing them to evaporate. Scalping achieves results by increasing the number of earning trades and sacrificing the size of the wins.
Successful scalping takes a significant amount of focus and attention. The successful scalper is focused on acquiring many small wins to build a long-term profit. They are more likely to avoid opportunities for major gain because they can easily go the opposite direction. One bad trade with a major loss can easily wipe out a day or two worth of scalping transactions. Thus, the scalper must adhere to their trading plan to control loss and look only for the opportunities defined by it.
Generally speaking, scalping can be done at about any time. The periods of time when there are more participants allow for cleaner and greater moves in the market. It's not worth your time and efforts to look for opportunities during slow periods that do not suit your trading strategy. It's a quick way to frustrate and mentally exhaust your-self which will translate to mistakes and missed opportunities when it counts most.
