Who Is A Successful Forex Scalper
Definition of Scalping
Scalping is a trading technique or strategy with which traders make multiple trades throughout the day, and try to make profits on small price changes. The main aim of following this strategy is to make hundreds of small trades in the day, and then collect a huge profit in the end.
How does it work?
Traders (or scalpers) basically buy at the bid price, and then sell at the ask price to attain profits. Even if the bid-ask difference is just a few cents, hundreds of such trades during the day help traders to gain a cumulative profit in the end.
Who is a successful Forex Scalper?
A successful Forex scalper is one who knows exactly when to enter and when to exit. Since scalping gives plenty of opportunities during the day for a person to make trading moves, one must know and realize that these can either turn into profits, or into losses. The trader must have an understanding of when and how he/ she should stop the losses from accumulating.
Most successful Forex scalpers do the following:
- Stick to a strategy
Good scalpers know that sticking to their strategy is the best thing. Getting carried away with emotions, or being tempted to make more than the required number of trades because of greed is not a good thing; it stops you from thinking practically and logically, and sooner or later your losses start to increase.
- Analyze well
It is important to analyze the market well before you start with scalping. There are two kinds of analysis that become important here. The first one is to analyze the situation based on how a particular product or feature behaved in the past; that gives you some idea on how it might behave now. Secondly, one must be updated on what’s happening in the present scenario; so that a comparison can be made between the past and the present, and a possible future can be determined or predicted.
- Keep it serious
Remember, scalping is not a game. It is not gambling. It is serious business, and you must keep it that way in order to earn profits. There is no scope for you to make unplanned moves or take impractical risks, because losses can start to accumulate very quickly if you go wrong.
Can everyone try scalping?
The answer is NO. Scalping requires good understanding of the market. You need to be in the game for sometime to understand how things work, and post that you need to start with basic trading strategies. Only when you have mastered the art of basic trading techniques should you start to experiment with scalping. And then again, make sure that you are not using all your previously earned money in this. Set aside a certain amount, or a specific goal to test the waters and check whether it is working in your favor or not.
It is essential that new scalpers know something about ‘risk management’ in order to make the best trading moves; that helps to limit the number of mistakes one might make. You can seek help from forex brokers if you are a novice in the field of FOREX trading. Surely, with their years of experience in the field, they can help you out.