When talking about foreign exchange markets, scalping refers to the act of making a large number of trades that produce individual profits. It is a trading style which specializes in taking profits on small price changes. It is usually done when a person enters a trade, and some profit has been made. The main aim of the scalper is to take as many small earnings as possible and not to let them evaporate. A successful scalper has a much higher ratio of winning trades against the losing trades while keeping the profit roughly equal or slightly more than the loss.
It requires the traders to have a strict exit strategy as one considerable loss has the capability of eliminating many small gains that the trader has worked to obtain. The primary requirements of this technique to make the trade successful is to have access to the right tools, make use of the live feeds, a direct access broker, and the stamina to place a lot of trades.
Scalping is a strategy used by day traders to identify their opportunities and profit from the intraday movement of the stocks or other securities. It is assumed that most stocks will complete the first stage of action where the stocks move in the desired direction for a brief period. Some of the shares will cease to advance while others will continue to push. Scalping achieves results by increasing the number of winners and sacrificing the size of the wins.
1-minute scalping strategy
Scalping 1 minuto (Scalping 1 minute in Filipino) strategy is the primary strategy being used by the beginners. It has recently gained a lot of popularity due to its high trading frequency. While using this approach, you must do the following things-
- First, you need to put your chart time frame to one minute.
- Secondly, you must ensure that the two default indicators are applied to your charts.
- Now you can review your table since these indicators make the charts clear and help you to analyse the chart accurately.
- Review the signals for the opening short and long positions using the scalping technique.
Various scalping techniques can be used to enhance your scalping strategy. One of the methods involves putting a stop-loss to every position you open. A stop-loss eliminates your chances of the risk of generating a significant amount of losses in the short order. Another scalping technology involves comparison of your primary time frame with the time frame from another chart containing different time frame.
The prime advantage of using scalping techniques and strategy is that you can save a considerable amount of time and energy. Over the period many strategies are improved, and new ones are developed, but you must program them only after you have seen a consistent result over a considerable time frame.
Scalping is a very beneficial technique which can help you gain a right amount of profit. It will maximize your chances of winning altogether. Adhering to the strict exit strategy is the key to making small benefits compound into substantial gains. And this can be achieved only by using the right scalping strategy.