Forex scalping is a trading method that focuses on the smallest movements of a currency pairs or market, and the exploitation of this small movement by forex traders. Typically, a forex trader will not care about the direction of movement within a market, but will trade in a high volume of positions over a very short time period.
What this is doing is taking advantage of very small movements that are commonplace in the market throughout the day. These movements could be as little as just a few pips that, to another trader would be somewhat meaningless. To a trader who is engaged in forex scalping though, these small movements of between 5-10 pips can be traded many times within the same trading day. This volume of trading, can help make sure the cumulative profit from forex scalping is increased.
forex scalping can become a viable trading strategy due to the frequency of trades made when employing this technique. This means that traders will need a few key qualities to bet going as a scalper. Primary among these is focus.
Forex scalping considers the smallest forex market movements, and typically over the shortest available timeframes. These time frames are usually within the 1-minute charting windows. These tiny movements within such fast-paced time frames may not even register with standard traders who typically operate over at least 1-hour timeframes. The breakneck speed of trading in and out of these small windows throughout a session also require you to have great patience in forex scalping.
Patience in forex scalping is key since there may only be a few small windows of opportunity to engage in scalping throughout a trading day. Despite this, traders still need to watch the markets throughout each minute of an entire session if traders really want to have the best chances of scalping successfully.
New forex traders, may also have to choose from manual forex scalping or using an automated trading system that does the scalping for them within the parameters that they set. Naturally, manual scalping may be a lot more time consuming, though the use of automated systems usually comes at a price, and such systems may not always be supported by forex broker.