The Basics of Forex Scalping

Introduction to Forex Scalping
Forex scalping is a trading method which involves opening and closing many trading positions in short time-frames. Often the liquidation of a position comes in just one minute after it is opened. Many Forex Brokers forbid scalping, some allow it, and others allow it under a certain policy. The outcome of scalping is either a minor loss or a minor gain. That means a very small exposure to market risk but from the other hand a small profit potential. Of course, the combination of many small trades can lead to significant gains or losses. Scalping assumes that at the end of the day gains will be greater than losses and trading commissions combined.

Scalping requires patience

A trader that is implementing a scalping strategy needs to be patient. In order to exploit market opportunities, you need to select the perfect timing to trade the market. Even Forex Robots need to choose the right timing to trade the market. The most successful Forex Robots in the market signaling only a few trades per week.

Of course, a typical scalping strategy may involve tens or even hundreds of trades on a daily basis.


Limit your Daily Losses

Successful traders always impose a limit on their daily losses. Some trading days will prove great some other will prove catastrophic, so it is important that each trader has a pre-defined level of maximum daily accepted losses. If that level of losses is reached after some hours of trading or even after some minutes of trading then the trader must be is off for that particular day. By this way, trading losses will be minimized and tomorrow can always be a better trading day.


Aren’t all Trading Days the same?

Aren’t all trading days the same? Of course, they aren’t the same.

Take for example a trader that implements a scalping strategy which is based on a predefined volatility range. When a currency pair makes an abnormal straightforward movement then the trader opens a quick position in the opposite direction with a stop-loss and a take-profit order.

Let's suppose that a particular day the market is incorporating very important news that can strongly differentiate the fundamental outlook of a currency pair {in a way that the domestic currency will be strongly devaluated against all other currencies}. In that particular day when the market will be news-driven the trader imposing a volatile-range scalping strategy can face tremendous losses.

So it is better for that trader to quit trading and choose other trading days that can prove much more convenient according to his trading style.

Automated Forex Trading & Automated Forex Trading Systems

Most Forex traders don’t have the time to trade the market in a full-time schedule. That is why automated Forex systems have been evolved and applied over time. Note that automated systems using VPS hosting don’t require the use of personal computers.

But, a Forex Scalping Strategy doesn’t have to be fully automated. Multiple sub-trading strategies like a stop-loss and a take-profit strategy may form a semi-automated way of trading.

» Automated Forex Trading at


Forex Scalping
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