The desire for a quick profit in the Forex market led to the emergence of several trading strategies that allow you to get profit on short-term deals. For a trader, such a method of trading (scalping) means also the opportunity to give the market a little time, often only during the active period of the American session.
About a scalping strategy
The main objective of scalping strategies is to obtain a profit on any, even short-term changes in the price of the chosen instrument. But a high chance for closing the deals with profits is closely related to the increased risks. Often, a trader takes from the market no more than 10–20 points, which leads to the desire to increase the working lot.
During an unsuccessful opening of a large order, the deposit may be reduced by half in a matter of seconds. Therefore, there are rules experienced traders try to adhere to, which are described in the AvaTrade review:
- Stop Loss is required. Without it, the risks of obtaining losses instead of profits are great.
- You cannot simultaneously open a large number of orders. The free margin on the account decreases the faster, the larger the work lot.
- The working tool of the scalper is timeframes from M1 to M15. For periods of M30 or higher, only the general trend of price movement is checked.
Scalping requires perseverance and patience. On the minute charts, the price movement is very chaotic, and often gives the impression of a lucky moment for entering the market. Such moments should be avoided because trading on Forex gives more profit to those who approach this process as a job, not as a game.