Familiarity with scalp trading in Forex
Familiarity with scalp trading in Forex
In the forex market, the world’s largest financial market, many transactions are carried out daily, and these transactions are carried out with different strategies and trading methods. Scalping in forex is one of the types of strategies in the forex market, and in this article, we are going to introduce you the scalp trading and scalp strategy in forex. So to know what scalping strategy is, stay with Zand Traders.
What type of trading is Scalp?
Scalp trading, also known as scalping in Forex, is a common trading strategy that is carried out in a relatively short period of time between the opening and closing of a trade.These types of transactions usually only take a few seconds to a few minutes at most. A trader is literally trying to make many small profits from a large number of trades throughout the day.
A scalper can make up to several hundred trades in a day and earn a small profit from each trade. In this type of transactions, all positions are closed at the end of the trading day.
Scalping strategy in forex is more suitablex for whom?
Since scalpers basically have to constantly monitor the charts, the forex scalping strategy is the best option for traders who have enough time and can devote several hours to their trades without interruption.
In order to succeed in this type of trading, there is a need for intense concentration and quick thinking, and not everyone can handle such fast and difficult trading.
In fact, this type of trading is not suitable for people who are constantly looking for big wins, but for traders who tend to make small profits in the long run to reach a total profit.
So if you have the following features, you can become a scalp trader in forex.
-You are interested in fast and exciting trading.
-Be able to focus several hours a day on the chart.
-Do not want to do time-consuming and long-term transactions.
-Have the power to make quick decisions.
What points should you pay attention for scalping in forex?
Now that you are somewhat familiar with scalping strategy in forex, you need to know what points you need to pay attention to before doing such transactions.
Choose currency pairs that are more liquid than others
In order to make Scalp trades in Forex that will bring you more profit, it is necessary to choose currency pairs with fixed spreads and because in this type of trades you will enter the market frequently.
Currency pairs such as EUR/USD, GBP/USD, USD/CHF and USD/JPY basically have fixed spreads because they have the largest volume of transactions in the forex market.
Only trade during the busiest hours of the day
The most trading hours during the day are the times when the trading sessions overlap each other, which are from 2:00 am to 4:00 am and from 8:00 am to 12:00 noon. Eastern Time (EST).
Try to focus on one currency pair first
Scalping is very popular in forex, and scalping trades take up a lot of trading volume, and if you can put all your energy into a currency pair, you have a better chance of success.
Note that trying to scalp multiple currency pairs at the same time means failure. After a certain period of time has passed and you have gained the necessary experience, you can start with another currency pair and continue working.
Ensure proper financial management
This point is necessary to follow with any type of trading, but since in scalp trading you are doing many trades in a day, it is very important to adhere to risk management methods.
Types of scalp trading in Forex
Scalp transactions are three types in forex, which are:
Market-Making scalp trades
Market-making scalping is a type of scalping that is not only low-profit, but also very complicated. In this type of trading, the profitability is so low that any change and movement of the price may cause losses for the trader. In market-making scalp trades, traders compete with market makers.
Scalp trading based on traditional approaches
There are three types of scalp transactions:
In the first type, success and profitability in this type of trading requires that you have stocks with multiple price movements. In addition, in scalp trading based on traditional approaches, a correct strategy is needed and it is also possible to predict price movements well.
In the second type, scalp trading is done with the strategy that a large number of existing stocks that have little price movements are bought by the trader. In this type of trading, floating stocks will be more successful.
In the third type of scalp trades, according to the available signals, the trader enters a position or so-called trading position and immediately after seeing the profit, he exits the trade at a rate of one to one.
How to make scalp trades
In general, scalping in forex is done in two ways:
Scalping strategy in forex, which is done manually, the trader himself decides when to enter the trade and when to exit the trade.
But in automatic scalping, the trade is entrusted to the computer system by the trade, and that system automatically executes the trade.
What are the advantages of scalp trading in Forex?
If you, dear friend, have just entered the forex market and are studying to get information about the types of transactions and strategies available in forex, you may also have this question, what kind of advantages are there in doing such transactions? Reading this part of the article will help you find the answer to your question.
Advantages of scalp trading in forex
In scalp transactions, there is less risk and the possibility of loss and adverse events is less than other transactions.
Small price movements are easily obtained in this type of trading. For this reason, you can easily catch the right opportunities in the trade. (It should be noted that when there is a severe imbalance between supply and demand, large price movements occur.(
In scalp trades, the possibility of large price fluctuations is much less than small price movements. Even in markets that are stagnant, small price movements are possible and this makes scalp traders profitable in such markets as well.
What is the purpose of scalping in Forex?
In general, before entering into the transaction, traders must first perform technical analysis and carry out the necessary checks.
Scalpers or scalp traders are those traders who tend to have a reasonable return on their trades, even with low profits.
The purpose of doing this type of trading in the forex market is that during one trading session, the trader will earn profit several times. In such transactions, the trader may enter the transaction several times and exit it quickly.
Scalping strategy is one of the types of strategies in the forex market where traders make many trades but with little profit. In the article that you read, we mentioned the topics related to scalping in forex and the purpose of doing this type of transactions. In addition, we said that scalp trading in Forex is associated with less risk than other trading, although there is less profit in it.