Somrat4030
Member
Pros and Cons of FOREX Scalping
Pros
One of the biggest advantages of Forex scalping is that it allows you to place several trades per day. Many people like to stay constantly involved in the market. Most scalpers place many trades over the course of the day and this can be very exciting to the trader.
Another advantage of this strategy is that you can bring in small, regular profits. With other trading strategies, it can take days or weeks, before you ever close a profitable trade. With a good stopping strategy, you can bring in money every single day. Individuals who are trying to live off of their Forex trading might prefer this method because it is consistent.
Cons
One of the big potential disadvantages of this strategy is that it can be very difficult to predict what the market will do on a minute to minute basis. While some people can follow the trend and make profit over the long-term, it can be more difficult to accurately say what will happen within the next five minutes. Many experts believe that it is impossible to use technical indicators in order to consistently be profitable with short-term scalping trades.
Which forex instruments are best for scalping?
Just about any currency pair or commodity CFD is great for scalping the markets. Each of these financial instruments can behave differently under different circumstances.
It is up to the trader to understand how each of these instruments behaves and then pick a select few.
One of the key things to be successful with forex scalping is to stick with currency pairs or commodities that you are familiar with.
For example, crude oil CFDs can be volatile during the weekly crude oil inventory report. Likewise, the JPY can gain volatility during times of market panic.
What Type of Brokers Is suitable for Forex Scalping?
Being a DD or NDD broker doesn't necessarily make a broker fit for one style of trading.
In general, ECN and STP brokers have better spreads, however, there are DD brokers with fixed spreads that have lower spreads than many NDD brokers
Just make sure that they are regulated so you don't stumble upon the mentioned problems. If you have big problems with them, the best solution is to change your broker.
Forex scalping can be a great way to play the markets and ride the fluctuations currency pairs are known for. It's not a risk-free trading strategy and you have to be a certain type of person to attempt it. However, if you're someone that thrives on pressure and doesn't mind jumping from position to position in search of incremental profits, scalping is fantastic.
You can learn more about forex trading scalping at forex forum.
Thank you
