When I first started trading forex , I thought that scalping was a fast, easy way to make money. Put on a trade at high leverage, aim for a pip or two, and collect the money.
Until you lose a couple of times in a row and find that your losses are so much bigger than your wins that you easily end up in a hole that you can't dig your way out of.
Unfortunately, the answer is to set your sights lower as far as how much you want to make per trade and probably set your targets higher. Scalping as a trading method is not recommended. Most traders using this method don't have a solid reason for their trades, and it creates a knee-jerk type of trading that ends up not serving anyone well. If you've ever heard of position trading, this is what I would recommend if you want to make some money scalping.
When you position trade, you put multiple trades on in a currency pair and end up with an average price. What type of position and the risk levels are up to you. I prefer to do position trading over weeks, and take scalps here and there in my existing trading direction.
However, if you wanted to try to be creative with that, you could take the same approach on an intraday basis and do smaller positions. About now, you're probably saying, this doesn't sound like the new fast money method that you heard about on a forex trading forum.
It isn't, it also wouldn't be the road to blowing up an account. Trading forex is really about controlling your emotions and managing forex risk. There are various things you can do to decide your trades, but if you don't control your emotions or manage your risk, you'll be finished before you can start. If you want to scalp, you can't just pick an arbitrary direction and put on a large trade. That is what we like to call the trade and pray, and if you're doing it, it's only a matter of time before you end up laying by the wayside with an empty trading account.
There is a saying that says "You can try to scalp the forex market, but eventually it will scalp you. Most of the time traders will eat up most of their capital before they call the experiment a failure. We want to feel smarter than the market. The truth is that the market is just the market, all we can do is follow it.
There isn't a "beat the market" method. If you must scalp, you should follow these rules:. Updated December 01, So, what is the answer if you want to use scalping as your trading method?
This seems silly to say, but overall, scalping is not a viable trading method. It can sometimes be used in combination with other methods, but it isn't a method that should be used by itself. If you are scalping, instead of really trading, learn to trade forex.More...