Like we already know, Forex is the international currency market where one currency is bought and sold for the other. This is one of the biggest markets in the world, and there are a lot of people who want to succeed in forex. Every trader, sooner or later wants to know how to trade steadily and successfully in the currency market.
Currently, there are hundreds and thousands of strategies that can be used; however, every currency trader realizes that there is no one universal trading strategy. Developing a forex trading strategy is very difficult; it requires great trading experience. But still, there are some basic strategies of Forex, and we will discuss one of them.
Scalping is one of the most controversial trading strategies in the currency market. Some traders consider it a guarantee of success, while others consider it to be a waste of money.
The essence of scalping is in the following. A trader opens a position in the forex market, waits for a few seconds or minutes, gains several pips (hence the name of the strategy) and then closes the position. Capturing small price swings, for example, within an hour, you can dramatically improve the profitability of short-term transactions in the Forex market. The trader can make such transactions many several hundred times during a day.
However, scalping is not popular among professional traders. You may manage to gain a reasonable sum, but sooner or later, you fail to receive a constant income over long periods of time.
One of the difficulties of scalping is a great tension with trading. The thing is that scalping requires a permanent presence of the trader in the Forex market, with stressful situations repeatedly occurring throughout the day, which reduces the number of rational decision-making while trading.
Another difficulty concerns brokers. Typically, brokers do not like those traders who commit many operations. Therefore, during the day, Brokers restrict the trader’s number of applications, and in addition, traders who often give too many orders are asked to close their accounts.
So, think twice before choosing a Forex trading strategy.