All Forex traders invest their time and resources online to achieve one goal: make money. Hence the question of “which is the most profitable Forex strategy” to be honest, has no standard answer. If anything, the saying “there are many ways of killing a rat” truly plays out in Forex trading in that there are multiple strategies of making money. Different traders utilize each of these strategies with varying levels of success or failure. When it comes which strategy you should use to ensure massive returns, the choice is really up to you.
However, there’s one strategy that has been proven to be quite the catch amongst successful traders – Forex Scalping. This popular method is quite a sensation in the world of trading. Ever wondered why this is so? We will tell you all about that in this in-depth Forex scalping guide.
Meanwhile, you must understand the there is an option to make money from Forex without the needed skill or knowledge. The trick is to follow the experts and copy their trades. Programmers have built mt4 trade copiers that can copy trades of expert traders to your account.
What is Forex Scalping?
In the world of Forex trading, scalping is a term used to signify the “skimming” of little profits on repeat. Typically, one goes in and out of a trade position countless times per day.
Forex scalping happens to be one of the most profitable Forex strategies for its trading safety.According to expert traders, since scalpers hold their trade positions for a short period of time in contrast to regular traders; they enjoy a short market exposure and ultimately reduce their risk of losses. A scalper is primarily concerned about bid-ask spread while things like range and trend don’t mean much to them.
Pros and Cons of Scalping
To establish whether Forex scalping is useful for your trading technique, here are a few pros and cons of scalping.
- Less Risk: A quick exposure to the market takes the risk away and saves you the trouble unforeseen occurrences.
- Frequent Moves: This may come as a surprise to you but the smaller moves in scalping are quite frequent compared to larger ones. You can make the most of this truth and make lots of profit while scalping.
Small moves are quite easier to attain, meaning that you can get by without being affected by small supply and demand factors.
Even when the Forex market is quiet, a Forex scalper can benefit from small moves.
- It requires a large deposit
- Amateur scalpers have a lesser advantage over bankers and dealers because the latter group is well-versed with this profitable Forex strategy.
- A scalper needs quick reflexes, exemplary mathematical skills, and good instincts.
- It is impractical to scalp and keep up a great risk/reward ratio.
- Scalping is time-consuming and may actually be a cause of stress to some traders.
How Do You Know If Scalping Is For You?
Let’s face it, despite scalping being the most profitable Forex strategy, it is certainly not every trader’s cup of tea. First of all, it features rather small returns on each position opened. Great profits are only hidden in the accumulation of these small profits over time. Basically, scalpers are not much of risk-takers. This means they don’t mind letting go of great profit opportunities if it means putting their small gains on the line. With this in mind, scalpers needs patience – lots of it at that. You will have to sit tight for long hours on end as your small leaps of success accumulate to reasonable profits. Therefore, if you are impulsive and impatient, hoping to score crazy profits over a single trade, scalping will only lead to frustration and constant disappointment.
Additional Facts about Forex Scalping
To round this guide of Forex scalping, here are a few more things about it you need to know.
- It Uses Automated Systems: We’ve already established the fact that scalping is time-consuming and demanding. As a way to combat these challenges and make the strategy available for busybodies, automated trading systems have been designed. You can make use of them to shorten your time of trading. That said, the systems still require training and practice to use scalping techniques.
- Attention Comes With the Territory: Compared to other trading strategies such as trend following and swing trading, scalping requires a high level of attention from the trader. On a typical day, you’ll be opening and closing tens of trades, and in some scenarios, even a hundred positions. Since each of the positions needs to make a profit, you cannot afford to concentrate on some and neglect the rest.