Exchange Scalping - what is the essence of this strategy?

This strategy has been extremely popular both in Forex and other financial markets for several years now.

It is this that allows you to get maximum profit through the use of leverage.

Scalping is trading on the shortest time frames, with the conclusion of a large number of short-term transactions.

The profit in this case may be only a few points, but as a result of the maximum ratio between the trader’s deposit and the volume of transactions, the profit increases hundreds of times.

What is scalping?

The easiest way to understand the essence of this strategy is with a specific example - having a deposit of $100, and using careful trading with a leverage of 1:30, you can make transactions with a volume of about 0.03 lots, which will give you $0.30 per move paragraph.

And if you consider that on average you can earn 30-50 points per day, your earnings will be a maximum of 15 dollars. A completely different situation arises when trading with scalping, in this case a leverage of 1:200 – 1:500 or more is used, and trading volumes will increase to 0.2 lots or more. And this will allow you to have 2 dollars from one point. This option will already allow you to increase your deposit several times, and this is the calmest scalping option.

Features of scalping.

1. Brokers for scalping - not all brokers will allow you to make money so easily; for trading you need companies that have real access to the foreign exchange market, that is, those that do not play against you, but only organize the work.

You can find a list of such companies in the article “ Brokers for Scalping ”.

2. A transaction rarely lasts more than a few minutes; as soon as the financial result amounts to a couple of points of profit or loss, the order is closed.

3. The number of transactions per day reaches several dozen, the total profit is achieved precisely due to the large number of transactions.

4. Trading instrument – ​​for scalping, you should choose currency pairs that have the smallest spread, since otherwise the broker’s commission may completely cover the profit received.

The pairs usually traded are EURUSD, USDJPY, GBPUSD. The best option is a floating spread, the value of which changes dynamically depending on market volatility.

Therefore, you should be especially careful when opening a new transaction. 5. Money management – ​​scalping is one of the riskiest strategies, so the account should contain only the amount necessary for trading. All profits received are transferred to another account or funds are withdrawn.

You can find a detailed description of the trading system itself in the “ Forex Strategies ” section on this website.