Why Scalping Forex Does Not Work
If you visit forex forums you will certainly hear people talking about scalping forex. Some swear that it is the only way to trade, others say that it is a crazy method that has no hope of making money. So who is right? Maybe both, because it is true that some traders do use forex scalping methods very successfully, the majority of people who start out trying to use scalper strategies in the currency trading market lose big time.
In this article we will look at some of the reasons why that happens, so that you can make an informed decision about whether to try scalping forex. This will give yourself the best chance of making money with currency trading because you are more likely to start out with something that has a good potential for beginners.
So we start with the understanding that it is certainly possible to make money with scalping strategies but there are certain things that you need. The first is a broker who accepts this method of trading. Don’t waste time setting up demo accounts with market makers who probably will not let you scalp because they will lose money if you make it.
There is no point in hoping that you can get away with it for a while: you will simply have your trades canceled and your funds politely returned to you as soon as they figure out what you are doing, which will not be long. This is frustrating, stressful and a big waste of time. So ask the question before you even look at their trading platform.
Second up you will need a very quick analytical mind. Forex depends on analysis and scalpers have to do it fast. Sure the charts and indicators do the calculations for you but you still have to check other time periods and take everything in at a glance. You have to be attentive 100% of the time. You have to be the kind of person who feeds on stress.
You also have to be a person who does not easily become discouraged. Scalping systems usually involve making a lot of small wins. There will also be occasional but often heavy losses. This means you could have a day with as many as 9 out of 10 successful trades but still end up with an overall loss. With some scalping forex systems you can even have one loss that wipes out several days or even weeks of profits. You have to be able to take this and continue without losing motivation.
So when people find that forex scalping systems do not work it is not necessarily a problem with the system. It may be just that the trader is not suited to the lifestyle of a scalper. The same person might do very well with a long term forex trading strategy that involves following trends. Think carefully, therefore, before you invest your time and money in scalping forex.
