Method Of Scalping On Forex Trading

Method of scalping is very popular among the Singapore Forex traders. It is used by traders who get the profit from the price changes during one day. Usually the time between the position opening and closing is only few minutes. The profits gained from these positions are low too, but the total earning achieved by the large number of positions can be high enough. Some traders may do up to 200 positions a day.

Newbie traders often get a false impression of the fantastic opportunity to increase their capital very fast making scalping as there is also an opportunity of reinvestment in case they lost the funds. Unfortunately this first impression may be deceptive as without any experience and proven strategy, this tactic is doomed to failure. First of all you need to know on what level you place the stop-loss orders. Because if you put it too close to the price of opening, it increases the risk of losses in the market during the noise even if you can predict the direction of trend correctly. In order to avoid this risk, we recommend you to avoid placing the stop loss if you make scalping. But you must always be in front of your computer and watch your positions. In case of a strong movement against you that there is no opportunity to roll back to initial levels in the next few hours, you must close the positions, otherwise you may lose more. More than that, if you have a large investment and trade without the stop loss, your total deposit may be lost and you will get a margin call.

The second reason of the beginners’ failure is the emotional side and the tension that arises when trading with real money. We recommend all Singapore Forex traders to try scalping trading on a demo account first, since there is virtual money and that’s why there is no fear of loss.

If a  Forex trader is doing scalping, he must constantly be on the market that causes a pressure and stressful condition. Due to his emotions he can make wrong and irrational actions that will have negative influence on the trading. This tactic is good for the experienced traders who learned to stay calm and emotionless while trading.

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