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: with a $100 deposit and cautious trading with 1:30 leverage, you can make trades of approximately 0.03 lots, earning you $0.30 per pip. Considering that you can earn an average of 30-50 pips per day, your profit will be a maximum of $15.

Scalping is a completely different story. Using leverage of 1:200 - 1:500 or more, trading volumes will increase to 0.2 lots or more. This allows you to earn $2 per pip. This option will allow you to multiply your deposit several times over, and it's the most secure scalping option.

Peculiarities of scalping.

1. Scalping Brokers – Not all brokers will allow you to make money so easily. Trading requires companies with real access to the forex market, meaning those that don't play against you, but only organize the work.

You can find a list of such companies in the article " Scalping Brokers ."

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

3. The number of trades per day can reach several dozen, and the overall profit is achieved precisely due to the large number of trades.

4. Trading Instrument – ​​For scalping, you should choose currency pairs with the smallest spread, as otherwise, the broker's commission may completely offset the profit. Commonly traded pairs are EURUSD, USDJPY, and GBPUSD.

The optimal option is a floating spread, the value of which dynamically changes depending on market volatility. Therefore, you should be especially careful when opening a new trade.

5. Capital management – ​​scalping is one of the riskiest strategies, so only the amount needed for trading should be kept in the account. All profits are transferred to another account or withdrawn.

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