Sep 16 2010
Currency trading is the performance of buy and sale transactions of foreign currencies in the internet. Scalping is a trading method gives profit from many positions in currency market that sometimes last no more than a few minutes.
Thus, unlike the traders who work with large amounts and ready to wait for a long time to make profit, scalpers can trade with a small balance and gain large number of small deals. In scalping every position may earn you just few pips. For that reason currency traders must open as many positions as possible to have a big profit. For a successful scalping, traders must learn to trade with minimal losses. Lets’ discuss some trading methods that make scalping less risky.
There are few types of scalping trading strategy: time trading, trading with a trend and trading against a trend. Time trading is a trading strategy where a fifteen minute graph is used. The specific feature of this technique is that the profit is fixed very quickly, but the deal seldom lasts more than a minute. Seeing a moment of the breakdown, a trader enters the market on the level of few pips above the maximum or few pips below the minimum of the rate. Once the price reaches your level, you must close it once you have earned 1 pip including spread. Please notice that if the spread of this currency pair is 3 pips so your total profit must be 4 pips in order to be in profit.
The other type of scalping trading strategy is called trading against a trend. This online trading is also called gathering cents where a trader is taking one-two pips of profit in each trade. Every trend has the fenomina of so called correction – a small wave against the trend. Study the candlestick chart and look for the bullish and bearish candles in the trend. This technique is recommended to be used during the first and last hours of trading in a specific zone.
The next most popular type of scalping is trading with a trend. This strategy of scalping is used during the trend’s rolling back. When the market is going up, you need to buy when it rolls back down, if the trend is downward, then you have to sell on a rollback up. It is better to use the 10 minute candlestick chart for this strategy and a moving average with a period of 10. You close the position once it reaches 2 pips of profit.
There are many
Singapore brokers that allow scalping, though we advise you to check it with your
Forex broker before you start using scalping. Some
Singapore Forex brokers don’t allow scalping and may ask you to close a trading account.
Sep 7 2010
A method of scalping is very popular among Online traders. It is applied by traders who have the profit from the price fluctuations during one day. Usually the time between the position opening and closing is very short and may last only few minutes. As a result the profits achieved from these traders are low too, but the total income achieved by the high number of positions can be high enough. Some traders may do up to 200 positions a day.
Apparently not all of these positions are profitable, the aim is to get the profit in total, that is quite possible. While making scalping the stop-loss order is placed closer to the rate of position opening in order to guarantee the diminishing of losses if the market changes its direction.
All Forex traders know about the changability of the online market. Even the rate within one day moves in a certain cycle with its ups and downs. If during one day the average price change is about fifty points, the difference between the minimum and maximum prices will have much greater value. Once you get a small trend, you will have a chance to significantly increase your capital.
Novice traders often get a false impression of the brilliant opportunity to increase their capital as there is an opportunity of reinvestment. Unfortunately this first opinion may be wrong as without any skills, this strategy is doomed to failure. First of all you need to know on where you place the stop-loss orders. Because if you place it too close to the price of opening, it increases the risk of losses in the market during the movements even if you can assume the direction of trend correctly. In order to diminish this risk, we recommend you to avoid placing the stop loss if you trade scalping. But you must always be in front of the computer and watch your positions. In case of a quick movement against you and there is no vivid marks to roll back to initial levels in the next few hours, you must close the positions, otherwise you may lose a lot. More than that, if you have a high deposit and trade without the stop loss, your total funds may be lost and you will get a margin call.
The second reason of the beginners’ failure might be in the emotional side and the tension that arises when trading with real money. We recommend all novices to try scalping trading on a demo account first, since there is virtual money there is no fear of loss.
Every scalping trader must be cautious while selecting a
Forex broker to trade with. Not all
Singapore brokers allow scalping. We recommend you to review the
best Singapore Forex brokers list and join the one that matches the needs of your trading strategy.
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