Key points for organizing scalping
Forex scalping is an excellent strategy for those who want to make a quick buck and aren't afraid of risk and hard work.
Many beginners believe scalping can be a fairly simple activity, as it doesn't require thorough market analysis or long-term forecasts.
The key is opening and closing short-term trades at the right time and withdrawing profits—that's the entire trading strategy.
In reality, short-term trading involves a host of important nuances that should be considered when organizing the trading process.
It's the organization of the process that's important, not a clearly defined plan, which is quite difficult to execute when scalping.
• First of all, you should decide on the duration of the transaction, since each trader understands a short-term strategy in his own way.
It is optimal if the transaction lasts at least 3 minutes, since many brokers simply do not count transactions of shorter duration.
At the same time, the maximum duration depends on the market, or more specifically, on its corrective movements. Don't delay closing the order too long, as this could trigger a price pullback.
• Assess the market situation – whether there is a clear trend on your time frame or, conversely, the price is flat. Moreover, sometimes it is the flat that allows for more effective trading.
• Controlling the spread size is a rather important point, as it is difficult to scalp if you need to compensate for a large broker commission during the transaction.
Therefore, it is best to always use a spread indicator - http://time-forex.com/indikators/indikator-spred so you can control the commission before each order is opened.
• Scalping indicator - they often write about scalping on the news, but it is still better to work based on technical analysis.
For these purposes, you can use the Stochastic indicator and various channel indicators , or you can simply try to catch corrective movements.
• Insurance against draining - when scalping, despite the speed of trading, you should also not forget about setting a stop loss. Only this will help avoid draining the deposit.
It is quite difficult to do this manually, so for these purposes it is best to use scripts that forcibly set a stop loss when opening each new order.
The stop size is set in points depending on how much you are willing to lose from each transaction.
Scalping trading is difficult to plan, but you can properly organize the trading process to reduce the risk of losses and, therefore, improve your trading results.
