Advantages and disadvantages of scalping.
There are a lot of stories on the Internet about huge earnings from Forex trading, and all of
them are associated with small deposits.
After all, it is clear that it is difficult to surprise someone with earnings of 10,000 from a deposit of a million. You can earn quickly and a lot when trading Forex only by using the scalping strategy; it is this type of trading that makes it possible to earn money even with a deposit of a couple of hundred dollars.
Like any other trading strategy, this strategy has its advantages and disadvantages, which is what we will talk about later in this article.
Advantages of scalping trading.
1. The first and most obvious is earnings; most scalpers increase their deposit several times during one session.
An example is the record of Larry Williams, who made more than a million dollars in a year with an initial deposit of only $10,000. Forex patterns that arise on the shortest time frames
are mainly used 3. Small deposit – trading with a deposit of $100 and earning 20-30 percent per month is unlikely to improve your financial situation. But by earning the same 30% per day, you can already make Forex your main job.
Disadvantages of scalping.
1. Let's start with the most unpleasant thing, almost 90% of brokers simply prohibit scalping, and do not think that in the trading conditions you will find a direct mention - “Scalping is prohibited”, most likely you will come across such parameters as the minimum transaction time or the number of transactions during one sessions.
Most brokers simply do not take into account profitable transactions lasting less than 10-15 minutes.
Therefore, in order to avoid any troubles when trading, “ Verified brokers for scalping ” should be used.
2. Huge risk - as elsewhere, big earnings are always associated with big risk; a sharp movement in the exchange rate can literally drain your deposit in seconds.
Therefore, when trading scalping, only the amount involved in trading should be on the account. 3. Busy – as a rule, a scalper makes at least several dozen transactions a day, and most of the time he has to catch the right moments.
Therefore, you should not rely on a short working day, especially if you do not have a large deposit. 4. Limited choice - usually only currency pairs with a small spread are used for work.
Therefore, the choice is really limited, in addition, if a floating spread is used, you have to catch good moments. If after listing the disadvantages and advantages of scalping you still have a desire to use this strategy, an entire section “ Scalping ” will be devoted to this topic on our website.