Scalping is considered one of the easiest strategies in Forex. This strategy is very popular among beginner traders, mostly due to its ease of use. It can be mastered by any beginning trader, who has basic knowledge in using MetaTrader terminal.
This type of trading is based on the rule of opening and closing transactions quickly in order to make a profit that will exceed the spread (that is, the difference between the buying price and the selling price). In other words, the trader-scalper does not wait for the positive balance to increase by even 10 points, and closes immediately after receiving a profit. Hence the name of the strategy is called «scalping».
The main feature of scalping is the large number of deals with small profit and loss. Even when trading small lots a trader may make a considerable profit during the session. This method is not popular among professional players because it is associated with the meaningless risk and absence of good entering and exiting strategy. Their claims are justified. But you should not take them for granted.
For a strategy to be successful, the currency pair chosen should have high liquidity and moderate volatility. EUR/USD is a favourite pair of pipsers that has these qualities. The choice of a broker is also quite important — some take a percentage of the trades, others put a certain spread and of course the lower these payments are, the more you have a chance of increasing your equity. And if you are interested in how to start on forex, follow the link start forex in east africa.
All smart strategies are calculated so that profits from open trades exceed losses. And scalping is no exception in this case. There are several variants of loss covering for this system: according to some it is necessary to increase the Stop Loss value (the amount of possible loss we have set or planned), according to others it is necessary to bind the increase of positions to the increase of your deposit (the bigger the profit, the bigger the Stop Loss value will be). The first strategy is more profitable, but also more risky, it is more dangerous because during the market movement in the direction opposite to the desired one, you will only get a big loss.