Friday, 25 September 2015

Forex Scalping

Basic Trading Concepts Defined

Not all traders will do well in scalping, but many can acquire the necessary skills for this strategy by careful practice using a step-by-step approach. As with most other activities, it is better to begin your training at the most basic level and to add upon your gains at each pace to approach perfection.
Controlling your emotions will probably be the first challenge you face as a beginning scalper. It may be difficult to adapt to the violent swings that you will have to deal with routinely, but by avoiding certain time periods, and adjusting your stop-loss order accordingly, there should never be too big a danger in scalping.
We’ll conclude this article by briefly listing the principles which must be adhered to by a committed scalper before consistent profitability is attained.

1. Discipline

Scalping is for disciplined traders. A methodical, even mechanical approach to trading currencies will increase the potential profits of any scalper, and if automation is necessary, there is no logic in delaying it. Acquiring mental discipline may require time and effort, but its beneficial in every aspect of life, and nothing will be lost as you put your trading career in order. If a trade must be closed, it must be closed. If losses need to be taken, they must be. Scalping doesn’t allow the trader much time for vacillation or worry, and whining and complaining have no place in this style. Face the realities and act in accordance: success is just around the corner.

2. Patience

Impatient, or arrogant traders don’t have a stellar future in scalping. Many people have attained great profitability in trading, but only through persistence and determination. It is even more so in scalping, where minuscule profits are expected to combine into sizable gains.

3. Calm

Scalpers need to remain calm in the face of market turmoil, especially those who want to trade directional, trending markets. Without emotional restraint, trading choices will be confused and arbitrary, and that is the least of what can be afforded by a committed scalper. Get used to losses and mistakes. Accustom yourself to mending the errors. And all should be well.

4. Regular Trade Sizes

This is always a necessity in trading, but even more so in scalping. Don’t make the mistake of doubling your trade sizes in response to a chance streak of wins. Don’t blur your vision by entering orders arbitrarily. Be disciplined, and ensure that your trades can be analyzed easily by standardizing your order sizes.

5. Concentration

Scalping can be an intense activity, and a good scalper needs to have a mind which can concentrate effectively on the task at hand for profit. If you’re scalper, make sure that the place and time period during which you’re active in the market is as peaceful and calm as possible. Have the kids sleep or play.  Ensure that you’re not distracted while scalping the forex market.

Reference: Tom Cleveland

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