Forex scalping is trading in shortest time frames and making gains out of small movements. Forex scalpers behave like trading specialists, they make decisions very quickly by analyzing charts and keeps the orders opens for seconds or a few minutes. Profits and losses are based on a very small amount of pips therefore, scalping needs a large amount of capital and high leverage.
Scalping is not for those who are willing to make big profits form a few trades. The objective of scalping is to catch a small number of Pips again and again throughout the working hours.
Forex Scalpers Skills
Following are a very important skill and habits need to have to be a forex scalper.
- Analyze the market scenario quickly
- Trade fast
- Takes quick decision
- Focus on charts and on spot price movements
- Opens and close a lot of trades with smaller profits
- Consistent attention on charts for several hours
- Don’t wait for long trends
- Keep calm in uncertain market movements
- If these are not your skills, then you cannot be a forex scalper.
Basic Forex Scalping Strategy
For every kind of scalping, there are few important principles which can be stated as a basic forex scalping strategy.
The below strategy notes are an applicable and necessary requirement for every kind of forex scalper.
Trade Liquid Pairs
Most importantly, choose pairs with high liquidity, because the greater the liquidity the smaller spread will be.
Pairs such as EUR/USD, GBP/USD, and USD/JPY are most liquid pairs with highest trading volumes.
Trade during busiest hours
The busiest market time is during overlapping hours. You must know the different market opening hours according to your location and time zone. Only during busy market hours, the trading pairs can make certain movements. During less busy hours the price movement is directionless, and cannot give result-oriented pips.
Consider the spread very much, because while scalping you will execute and close orders very frequently. Try to catch pips at least twice the spread otherwise the spread will take all your gains.
Aware of Economic calendar
Any new or macroeconomic event can make an unexpected movement. Therefore it is advised to have complete knowledge of economic calendar.
Order Open Period
Don’t keep the trade open overnight, because the scalper’s orders and analysis are based on the minimum time frame.
If any order goes against, it must be closed before it gets worse, following basic principles to be a scalper.
More related resources: Introduction to Japanese Candlesticks
Other helpful resources: What is forex?
Greatly appreciates, if you comment on and share the article on social media or other of your choice. Thanks.