Forex Scalping

Learning to scalped the forex market involves opening and closing a position in seconds or minutes at most. Even though scalping involves the use of leverage and higher leverage means higher risk, the short period of time a forex scalper is in a trade decreases the exposure risk that's inherent in trading or investing due to the holding of a position. If done correctly, scalping provides this additional degree of "risk control" that is not even present in day trading.

Why don't most foerx brokerage firms like forex scalpers?

Many brokers are making money trading against their clients through their dealing desks. Yes; this is still legal in the forex market. While this might not affect as much regular traders (even day traders) that stay in a trade for hours or days, scalpers are another breed of trader. The profitability of scalping currencies can be drastically reduced if the correct trading firm is not used. The small percentage of successful scalpers are usually "kicked out" by one forex broker after another.

While it seems profitable method when scalping the price movements, however the spread you pay when you open a trade makes the risk-reward more risky than the long term trading (trend trading).

For example if your broker charges you 5 pips spread for opening EURUSD position and your target is 10 pips and 10 pips stop loss; the price have to move 15 pips (5 pips of spread + 10 pips your target) to take the profit while it have to move only 5 pips ( 10 pips your stop loss - 5 pips of spread) and stop loss level will be reached.

So, the risk-reward ratio in this case is 2-1 which means a very dangerous and risky method to scalp!

Another risk in the Scalp is that one large loss could eliminate the many small gains that the trader has worked to obtain. So it needs a very good exit strategy to decrease this risk!s

The technique uses simple tools and does not require any special software (ie..Tradestation, Ensign, Esignal, etc...)It will work on other markets including listed stocks,and commodities.

This is a simple and easy to follow scalping system using basicindicators and is based on a sound foundation. Following this system you will be on the right side of the trend and will quickly be able to
determine when to trade and when to sit tight. Most scalp trades last under five minutes -
many less than one, so you will be in and out with your profit. Just as important, you will be
out of losing trades real quick and ready for the next trade.