Different type of forex traders will prefer different type of trading strategies.
Ultimately, every trader wants to get a pie out of the forex market.
Forex Scalping is one out of the many ways to trade forex.
Scalping is a method of trading where the traders enter a trade and exit the trade in a very short amount of time.
Some scalpers would stay in the trade for less than a minute.
Simply put, the goal to forex scalping is to earn or profit a few point or pips from the market.
On average, scalpers would target 5-10 pips and they would close the trades.
So what are the Advantages and Disadvantages of Scalping In Forex?
The Advantages of Scalping
- Very effective method of using capital with minimal risk per trade.
- High percentage win rate.
- Scalping is suitable for the impatient trader who is prepared to devote a lot of time and continuous focus to the market.
- Event risk is small as the scalper will usually be almost certain of a fill at the chosen exit point even if conditions suddenly change.
The Disadvantages of Scalping:
- Scalping is intense, draining, and demands a lot of screen time. Accurate timing is vital.
- Higher cost per unit of profit than longer term strategies.
- Scalping requires complex knowledge of market structure and order flow.
- Scalping can be very stressful and is not suitable for spread betting.
- Scalping fee of $1 per Mini Lot (10,000 base currency) applies. Relative fee applies.
- Minimum trade fee of $1 applies.
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