Trading method "scalping" (from the English scalping - cut top, scalp) - a strategy that only intraday trading with very short time, "life." The main distinguishing feature of scalping - closing sales orders when the profit of a few points. Also, this strategy is called - "scalping", from the word pips point. The main purpose of scalping - collect small profit from a large number of trade orders without exposure to excessive risk of deposit, due to the rapid opening / closing trading positions. Trading positions in this method open for a short time, from a few seconds up to 2 minutes. With lifetime sales orders over a few minutes, the trade is not skalpingovoy.
With the Forex market, so to speak, "the masses", that is, as soon as it is available for any individual trader, this short-term method of trading has become so popular that it is now a familiar currency speculator. This is due to the peculiarities of the currency market and the development of internet technologies that allow to trade at any time of day. Pick a trading strategy for a loved one is not a problem, as closing a business , it is important to approach a competent trading strategy and not to deviate from the rules, and above all not to be greedy.
Necessary conditions for scalping:
- The high liquidity of the marketplace in general, and the traded instrument in particular.
- Sufficient market volatility and tools.
- Low spread .
- No commissions with a broker.
- Permanent presence in the market.
Strategic framework:
Principles of trade method of "scalping" entail another characteristic feature - a huge number of completed transactions. Only one working day trader on the account may be sold from 20 to 100 transactions (and this is not the limit). For transactions speculators use, usually a one-minute chart (M1), at least - a five-minute (M15).
For the most profitable trade in this method should be used margin trading, and leverage should pick the maximum, which only can give your broker. Indicator of leverage should not be less than 1:500, and some dealing centers and brokers can allow you to use leverage 1:1000!
Once trading position covered spread size by a few points (from 2 to 5), it must be closed. Then again, looking for opportunities to open an order. The same rule applies to losing trades.
To search for possible sources and used only technical analysis of the current situation in the Forex market. Tools that can be used in the analysis, vary widely for each scalper could choose the efficient strategy.
Advantages of scalping:
- Indicators of profitability highest: 10 to 40% over the trading day.
- Trading can be conducted in either direction of the market: trend or flat.
- Trading can be conducted at any time of day.
- To work enough of the minimum deposit.
- Ability daily reinvestment of profits.
- Use the entire deposit to trade.
Disadvantages of the method:
- Use the maximum leverage can greatly cut back your deposit if misused scalping.
- When trading you do not have free time, because we need to constantly "keep" open transaction.
- Constant tension during trading.
- Initial minus the open transactions on the size of spread, which is sure to cover the profit.
- High risk with minimal profit. Earnings only 2-5 points, while you risk much of your deposit.
- Many brokers and dealing centers You can not install the stop levels closer than 5-Th points. It makes scalpers always be present at the terminal and keep a finger on the "button." Annuls the possibility to use some automatic trading systems.
With proper use of technical analysis tools can achieve good results in scalping. But there's also always follow all the rules: not to delay losing trades do not stretch and profitable "carry" provision 2.5 points!