Online trading is a performance of buy and sale transactions of foreign currencies in the internet. When trading some traders consider the trading as hunting, where the online Forex market is a dangerous beast with horns and teeth that can take all your money and kill your trading positions. Scalping can hardly be called hunting a wild beast, it is more fishing than hunting. This strategy gives a profit from many transactions in forex market that sometimes last no more than a few minutes.
Thus, unlike the traders who operate with large funds and ready to wait for a long time to make profit, scalpers can trade with a small balance and earn large number of minute deals. In scalping every trade may earn you just few pips. For that reason online traders must complete as many transactions as possible to have a big profit. For a successful scalping, traders must learn to trade with minimal losses. Lets’ discuss some trading approaches that make scalping less risky.
There are few types of scalping trading method: time trading, trading with a trend and trading against the trend. Time trading is a trading strategy where a fifteen minute chart is using. The distinctive feature of this method is that the profit is fixed very quickly, but the deal rarely lasts more than a minute. Seeing a moment of the breakdown, a trader enters the market on the level of few pips above the maximum or few pips below the minimum of the price. Once the price reaches your position, you must close it once you have earned 1 pip including spread. Please notice that if the spread of this position is 3 pips so your total gain must be 4 pips in order to be in profit.
The next type of scalping trading method is called trading against the trend.
This online trading is also called gathering cents where the trader is taking one-two pips of profit in each position. Every trend has the moments of so called correction – a small wave against the trend. Study the candlestick chart and look for the bullish and bearish candles in the trend. This strategy is recommended to be applied during the first and last hours of trading in a specific zone.
The next most popular type of scalping is trading with a trend. This method of scalping is applied during the trend’s rolling back. When the market is going up, you need to buy when it rolls back down, if the trend is downward, then you have to sell on a rollback up. It is better to use the 10 minute candlestick chart for this strategy and a moving average with a period of 10. You close the position once it reaches 2 pips of profit.
In this article we have shown some most simple and popular methods of scalping. Online traders who use scalping must act quickly and decisively. But also must be prepared for losses and understand that scalping doesn’t let you earn much at a time. You must collect your profits little by little.