Forex Scalping Strategy for Beginners

Collecting small profits by opening and closing position in a short time repeatedly in a day is the way of scalping. How is the application?

Scalper is what we call traders who tend to collect small profit (5-10 pips) by opening and closing position in short time and repeatedly in a day. The technique is commonly called 'scalping'. If a day trader makes two to four position each day, a scalper could possibly opens and closes dozens or even a hundred positions in order to attain profit target.

Scalping could only be done by someone who is comfortable with sitting in front of the computer and enjoy the tension that came with observing chart movement. Apart from that, a scalper should have strong mental and able to react quickly, whether the market moves in accord with his wishes or not.

The Tricks

These are the tricks for you who wanted to try on scalping:

1. Choose a broker that allows scalping.

Note that some broker limit the amount of position you could take in one day, and some even outright forbid this technique.

2. Trading platform's execution speed.

In this technique, speed of execution plays a vital role in determining whether you will enter at the right time (and price) or not. Therefore, you'd better test in demo account first to ensure that your broker has good execution speed, and to learn their requotes policy.

3. Cut the cost of each transaction.

Choose currency with small spread to trade, because it will help you in executing profit. Avoid brokers who takes commission, as it could very well eat your profit whole.

4. Choose brokers with 5 digit prices.

This one is not a pre-requisite, but you should consider it, because it will shape the execution of scalping. In scalping, one or two digits could make all the difference in the world.

5. Sufficient internet connection.

In the efforts of opening and closing position repeatedly, you should make sure that your internet connection is strong and stable. You should also know what to do if there are interruption while you trade.

6. Adequate electricity.

It will not be funny if there is a blackout while your position is still open. You should be prepared for such troubles, be it preparing secondary power supply or using Stop Loss.

7. Use 2-3 charts.

Use chart in 15/20 minutes time frame chart to predict trend movements, and use 5 minutes time frame chart to open and close position. Be sure you could divide your attention well.

8. Choose a suitable session.

Asian Market is generally suitable for scalpers. However, there are also scalpers who targets ahead of the European and American Market opening. At the aforementioned hours, trading volume in forex market is really high. In addition, there is often extreme price movement during market alteration.

9. Avoid high impact data releases.

In scalping, volatility around high impact data could disrupt your routine. That's why you'd do better to avoid it, except if you want to set trap technique by taking 5-7 pips.

Become A Scalper

Many of the best scalping techniques involves a minimum of three indicators. There are even traders who uses 7-10 indicators to scalp. With the help of many indicators, you could harvest profits. However, if recurrent small profits can add up, so is small losses. If the market moves to a different direction than the one you've predicted, close your position quickly. Remember than not all deals have to make profit.

Scalping could be an enjoyable experience, but it could also make you tired and stressed. To avoid that, make daily target and don't be tempted to trade more than that. When you experience loss, don't think to take revenge right then and there; there's still tomorrow.