Scalping on Forex (scalping).
There are a huge number of options for trading strategies on the Forex exchange, but any of the traders will tell you that the most profitable of them is scalping, which allows you to make a million out of several thousand dollars.
Scalping is a trading strategy in which maximum profitability is achieved through the use of high leverage. It is characterized by a short duration of transactions and a fairly high risk.
The essence of scalping on Forex is that a trader, using leverage, increases transaction volumes to the maximum, which significantly increases the profit received from one point.
For example , if you have a deposit of $100, then when you open a transaction of 0.01 lots, 1 point of price movement will bring you only 0.1 dollar, increasing the volume 50 times to 0.5 lots, we will already be able to receive 5 dollars from such a movement.
Agree, this is quite a lot for a deposit of $100. But it should be taken into account that the entire movement of trends consists of fluctuations that do not always go in the right direction. Their value can be from 2 or more points, depending on the time frame. But as can be seen from the example, our deposit can withstand a movement of no more than 20 points, therefore we should choose the appropriate time frame .
In our case it will be M1. The profit from one transaction in this case will be only a few points, but this is quite enough. After all, there can be several dozen, and sometimes hundreds, of such transactions per day.
Types of scalping on Forex.
Piping is the riskiest and most profitable option, leverage from 1:500 to 1:1000, transaction duration from several seconds to a minute.
Mainly used to accelerate the deposit. Calm scalping – trading on time intervals from 5 to 15 minutes, the size of the leverage here is significantly less than in the previous version and already ranges from 1:200 to 1:500. This allows you to slightly reduce the risk of trading. A similar trading option is described in the article “ The Best Scalping ”.
Main points.
Like any trading option, this strategy has its main points:
1. Broker – must allow this trading option, not limit the duration of transactions and their number during the day.
2. The spread is minimal and preferably floating; each point affects the financial result; you can track changes in its size using the spread indicator .
3. Order execution – fast and accurate ( Instant Execution ), complete absence of slippage or only its positive version.
4. Five-digit quote – is also more comfortable for short-term trading on Forex.
Scalping on Forex will allow you to significantly increase your deposit in just a few days, but constantly trading with such a strategy is extremely risky, so it is advisable to use it only if there is an extreme lack of funds.