Scalping trading

Scalping the Forex market

Scalping is a trading technique that is very risky to speculate on small variations in the stock market or forex for short term.

To understand this trading strategy, it is interesting to talk about different approaches to trading, analysis of stock markets and leverage.

The fundamental and technical analysis

In financial markets, there are several types of traders. The investor in the medium to long term and usually fundamentalist, he Eute; tudie economic data to find trading opportunities.

The trader “chartist” is a specialist in the graphical analysis. It identifies trends from chart patterns and levels of major awards with the historical record. This approach to trading is very popular because it is simple to understand and does not need to constantly monitor the news market. Technical analysis is important for day traders.
The Scalper Trader

A scalper trader can spend tens or hundreds of orders a day. Today, it is possible to speculate on short-term mouse click thanks to the high liquidity of financial markets such as Forex, the development of online trading platforms and competition between forex brokers who lowered brokerage fees.

The scalping is not the focus of all traders. The scalp should be particularly reactive and have a mind of steel. He can play on tiny variations of course with a high leverage which increases the stress. The scalp should be concentrated at each moment, because the slightest mistake can cost him dearly. Generally, the scalper is investing significant amounts in the markets calm and it reduces its leverage during times of high volatility. It mainly trade in liquid markets such as currencies in the forex, stock indices, but also through future or contracts for differences.

The scalpers have a success rate exceeding 50%, their goals of gains and losses are mostly identical (return / risk ratio). Although the trend in trading is less risky, the scalping occurs on the rise or fall. However, it avoids the nervous and volatile markets that are very dangerous for the scalping.
The leverage in scalping

Forex brokers offer leverage that can make scalping. With a moderate amount, a trader on the forex comes with a larger amount than its capital. Leverage is essential for scalping on the exchange or forex, but it also increases the risk of losing money. For this reason, the scalping trader must react quickly to cut their losing positions.
The high-frequency trading

The trading orders generated by the software are increasingly important. These robots traders placing orders for purchases and sales with a speed unmatched by man. These black box scalp that financial markets are developed by hedge funds or big investors build well. However, small traders can also develop specific strategies with automated trading platforms such as MetaTrader 4.