Forex trading is nothing new and we all have if not familiar at least heard its name. We might not know and understand What Forex trading is? However, it is pretty common these days and a lot of people are doing forex trading in each corner of the world. We all need to do some sort of planning for our investments where we indulge in different types of investment plans and forex trading is one good option if it suits someone. In Forex trading one can adopt different styles of trading and one famous one is Scalping which is a short term trading style and it is quite popular among the professional traders. Scalping is the shortest term style of trading which is even shorter than the day trading and it clears of many small profits from a large number of trades throughout the trading day. Scalpers have this belief that it is easy to catch and profit from small moves in stock prices as compared to the large moves.
Overall Scalping is a trading style that typically specializes in making a profit from small price changes after a trade is executed and is profitable. In these types of forex trading a trader needs to have a strict exit strategy or otherwise, one large loss could easily eliminate many small gains the trader has obtained. Thus a trader needs to have the right tools and a direct access broker and the right knowledge to execute multiple trades that are required for the strategy to be a success. Scalping is mostly based on the assumption of the stocks that they will complete the first stage of the movement. After the first/ initial stage their movement is uncertain and from here some stocks advance while the others are certain. A trader or a scalper here needs to make as much as advantage of the small profits that are available without letting them to pass by. Thus a trader gains his/her position by optimizing the number of winning trades while letting others reverse. Hereby increasing the number of wins scalping achieves results and at the same time sacrificing the size of wins.
Scalping is a popular short term investing strategy adopted by many traders where it is done to pocket gains on a regular basis unlike investing which is done keeping in mind long term view. This type of trading i.e., scalping does not require any fundamental knowledge of the underlying instrument that you are trading. Technically as soon as you entered the position at the same time you are looking to exit it hopefully immediately after booking one or two tick of profit without any emotional attachment to the trade. However, this type of ultra short term trading is intensive and requires full attention and concentration of the trader. You cannot afford to indulge in some other activities while you are scalping to book some profits. The safest way to do scalping is to follow the price and jumping into the trade when momentum is highest and then getting out quickly after booking some profit.
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