When I first heard the term ‘forex scalping’ I was intrigued. I wondered what the word scalping was doing associated with forex trading. When I learnt some more about it, I was even more intrigued.
It sounded exciting. FX scalping refers to a fast paced forex trading technique where the trader gets in and out of a trade within seconds.
I can tell you it is as exciting as it sounds. You are always on your toes and there’s never a dull moment. But, well, as exciting as it sounds, FX scalping is not for everybody. Before you read on ahead, it is a good idea to first assess whether you are suited to it or not.
To make money in forex scalping, you need to have a certain type of personality. It’s hard to imagine how fast paced this can get until you try it. Believe me when I say, the trading sessions can get frantic.
Through the session you are going to have to stay absolutely focused for hours on end. This actually means sitting in front of your computer and staring at the numbers rolling off the screen without taking your eyes off for even a second. After all, trades are made within seconds and you cannot afford to take the time off.
In addition to this, you have to be the type who can react quickly and jump in and out of trades without taking too long to analyze every move. Making snap decision is a key trait of a successful scalper.
If you are the kind of person who likes to analyze every trade and you need to consult several people before making any move, forex scalping is definitely not for you.
If you are thinking forex scalping sounds a lot like day trading, you’d be right. Scalping and day trading are both similar in that both traders close all of their open trades during the current trading session. Trades are never carried over to the next day.
Don’t let the term ‘short profit margins’ mislead you. These small profits can add up to a considerable amount at the end of the day.
In FX scalping, the best times to make profitable trades are during high velocity moves, which occur around the time when significant news events or economic statistics are released.
While scalping can be fun and challenging, it is absolutely important that you only engage in it when you feel absolutely up to it. If you feel tired, sick or you are otherwise preoccupied, stay away from the market that day. FX scalping is challenging and you need to be 100% focused to be able to stay at the top of your game.
Love the idea of FX scalping and want some insider tips? Drop me a line and let’s talk about it.