What is scalping? Is it worth a try?
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In trading forex we want to earn a few dollars in a short time. And which method can do that. And of course not everyone can apply, so let's go deeper.
Try making a small calculation, with 1 standard lot, the average value of a pip is about 5-10 $ . Thus, for every 10 profit margins, scalpers can earn $ 50 -100 $ at a time. If you repeat the process 20 times a day, the earnings will be $ 1,000 - $ 2,000. But the piece of Phai is available only on the mousetrap if you don't understand it. So is this Scalping method worth trying and paying attention to? See the article below!
What is scalping?
Scalping in forex trading is a term used to refer to surfing activity to make small profits and trade often by performing multiple open and close operations. day trading.
Scalping is not the same as day trading, in which a trader will open a position and then close it in that trading day; in other words, they never hold a position overnight, or in other words never hold orders too long.
While the "day trader" can look for opportunities to enter the market once or twice, even a few times a day, a scalper's market participation frequency (people Surfing is very high and they try to get small profits and many times in one session. The ancients have the sentence of the great cottage.
And while a day trader may use a 5-minute chart or a 30-minute chart, the front of the scalper is a 3-minute or 1-minute graph. In particular, some scalperers take advantage of times when the market is volatile around the time of release of economic data and other important news events, such as: release of employment data, GDP index, interest rate news, ... to earn profits.
Scalping characteristics?
Scalping is an activity that requires fast and accurate speed. In addition, to succeed a scaling strategy is clear, scalper must strictly implement according to that strategy.
Indicators ADX, RSI, MACD, stochastic,… are often used. Price chart indicators such as line MA, Bollinger bands and pivot points are used to determine price support and resistance levels.
Fully scalping based on technical analysis and short-term price movements. Due to the use of leverage to enhance the profit value of each transaction, scalping is considered a high-risk transaction type if there is no strict stop loss principle.
Conditions of a scalper?
Scalping style does not match with everyone. A scalper must have specific characteristics and qualities:
- They need high concentration for a certain period of time.
- It must also be someone who can react very quickly and decisively with new opportunities to appear. Just appear the appropriate opportunity is on the order, completely in principle.
- Assertiveness is also an indispensable factor when they need to cut a position if it goes against the initial prediction sometimes only two or three pips.
- Scalper needs perseverance and persistence.
If you have the "qualities" above, you will surely become a professional scalper.
What are the advantages and disadvantages of this trade method?
Make sure you understand what part of trade Scalping is. Finally, what are the advantages and disadvantages of this strategy?
Advantages
- Earn big profits in a short time: In just a few minutes you can earn a few dollars to a few hundred dollars.
- There are many opportunities in 1 day: A day can be up to a few dozen opportunities to trade.
- Do not hold orders for a long time: Only hold orders for a very short time.
- No loss / charge overnight: No overnight charge.
Disadvantages
- Great risk: Using high leverage, large orders, ... can lose a few thousand dollars in just a few minutes.
- High concentration: Patience, concentration, strict adherence to principles, ...
- ...
So with the characteristics and some advantages and disadvantages, you should consider before choosing this method.
Source: Compiled by HapieuForex
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