Forex scalping technique

By Ian Sani.

Millions of people all over the world turn to Forex trading when they wish to make some money. While some are long term players, others don’t mind taking a little more risk in order to make large profits in a short span. Such traders then turn to the famous Forex Scalping technique.

For the total novices, Forex Scalping is a short term trading technique that involves opening a Forex position and closing it in a very short span of time, hoping and speculating that the price change in the duration shall be in your favor. Unlike orthodox Forex traders, people who involve in Forex Scalping make large number of transactions, even up to one hundred within one trading week.

So one would wonder why don’t all the traders behave in this fashion and adopt this strategy to play the market. Well the catch with this technique is that even the slightest unfavorable swings in the market, as low as ten points can cost you heavily.
Different Forex traders use different methods of scalping. Since they are fast movers, the following factors are detrimental in scalping:-

1. Liquidity – Scalpers trade in really liquid markets as this enables them to process large volumes of trades and make small profits on each of them.
2. Volatility – Forex scalpers are most attracted towards markets that are stable. Even if the Forex market does not shift a lot in a day, the traders can still make a lot of profit.
3. Time frame – This has been well emphasized on. Scalping is all about large profits in small time frame.

A simple Forex scalping technique can be marking the essential support and resistance points on your trading chart and following it by putting a limit order at them. The trick then is to keep your eye open and wait for a small bounce. Remember, Forex Scalping is all about knowing when to exit safely.