Pros and Cons of FOREX Scalping

Forex scalping is a type of trading that involves utilizing short-term trades in order to collect profits from the market. With this type of trade, a Forex trader will open a position in the market and close it within a very short amount of time. In many cases, this type of trade will only last for a few seconds, or minutes. The ultimate goal of Forex scalping is to bring in smaller, regular profits, from the market instead of taking long-term positions. Here are some of the pros and cons of Forex scalping.

Pros

One of the biggest advantages of Forex scalping is that it allows you to place several trades per day. Many people like to stay constantly involved in the market. Most scalpers place many trades over the course of the day and this can be very exciting to the trader.

Another advantage of this strategy is that you can bring in small, regular profits. With other trading strategies, it can take days or weeks, before you ever close a profitable trade. With a good stopping strategy, you can bring in money every single day. Individuals who are trying to live off of their Forex trading might prefer this method because it is consistent.

With scalping, you will also be able to benefit from lower risk per trade. Individuals who scalp are only using a small position size in relation to the rest of their account. With the implementation of stop loss orders, you will only be risking a small amount of money every time that you trade. This can be a good way to preserve your bankroll and avoid taking the big loss.

Another potential advantage of scalping is that it does not take a great deal of market movement to be able to make a profit. With other long-term trading strategies, you have to set your sights on big profits which requires the market to move substantially for you to be successful. With scalping, you only need to market to move a few pips in order to reach your goal.

Cons

One of the big potential disadvantages of this strategy is that it can be very difficult to predict what the market will do on a minute to minute basis. While some people can follow the trend and make profit over the long-term, it can be more difficult to accurately say what will happen within the next five minutes. Many experts believe that it is impossible to use technical indicators in order to consistently be profitable with short-term scalping trades.

Another disadvantage of this strategy is that you have to be a consistent winner in order to be profitable. With this type of strategy, you have to win one trade after the other in order to accumulate a large amount of return. When you utilize a long-term trading strategy, you could potentially make a sizable amount of money with only one trade. With scalping, you have to win again and again in order to make a difference. 

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