The effect of broker on scalping
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  1. #1
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    The effect of broker on scalping

    Assume that a scalper opens and exchanges 30 positions on a day in the EURUSD pair, for which the spread is usually 3 pips. How about we additionally assume that his exchange sizes are steady, and that 2/3 of his positions are beneficial, with a normal of 5 pips benefit for each exchange. We should likewise say that the normal size of his misfortune is 3 pips for each exchange. What is his net addition/misfortune without the expense of the spread included? (Positions in dark) – (Positions in red) = Net benefit/misfortune (20*5)- (10*3) = 70 pips altogether. Which is a critical increase. Presently how about we incorporate the expense of the spread, and rehash the estimation. (Positions in dark) – (Positions in red + Cost of the Spread) = Net benefit/misfortune (20*5)- (10*3+30*3) = - 20 pips altogether.

    A dreadful amazement anticipates our speculative dealer in his record. The quantity of his beneficial exchanges were double the quantity of his losing ones, and his normal misfortune was about a large portion of his normal addition. Also, regardless of that momentous reputation, his scalping action picked up him a net misfortune. To earn back the original investment, he would require a normal net benefit of 9 pips for every exchange, all else continuing as before.

    Presently how about we rehash the same count, with another theoretical agent where the spread is only 1 pip in the EURUSD pair. The 5 pips for every win, and 3 pips for every loss (the same situation which was inspected first and foremost) with a one-pip spread would present to us a result of (20*5)- (10*3+30*1) = 60 pips in all out benefit.

    Why is there such a substantial inconsistency in our outcomes? Despite the fact that the numbers do represent themselves,

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  2. #2
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    some brokers offer high spread and so this will make trading with scalping is difficult as the scalpers looks for making of some little pips and so if the spread is big this will affect on trading and making of the profits, so the trader that wants to trade with scalping should always look for the broker that ffer small spread especially on the major pairs.

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  3. #3
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    That is a good explanation and concern coming from you, we should not be trading forex without knowing what is really happening around us, that is why you need the broker that is good and faithful to their clients. If you have such broker, yo will trade more and worry less, because they are always there to help you.

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  4. #4
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    Some brokers frowns on scalping and have huge spreads so that they could discourage traders they will like to scalp with their platform. But if you are a scalper, then I advise you to look for brokers who accept scalping and encourage it too by organizing scalping contest. Those kind of brokers will have low spreads and would encourage any method of trading. I guess more times each position are opened, they would always earn from the spread of that trade.

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  5. #5
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    Ifycoguy, traders need to know the place for them who did scalping, and so you are right about it, scalper need to take a look for brokers with this feature or allow scalping with them, because not all brokers will allow this and some brokers also limited them with the time too, but lucky us with roboforex, there is no restriction for scalping and also for the time too, then we are free to do scalping for how much dealing is done and earning too

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  6. #6
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    on scalping we use small orders and some broker have small spreads, some have big spread so always choose broker which have small spread or have zero spread, in zero spread accounts we pay some commision on every order i think so broker with small spread is best, roboforex also have small spread then many others

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    Since we all agreed that the major source of a broker income is through the spread, I see no reason why any broker will never like to encourage scalping knowing fully well that the more traders scalp in this business they more can earn from each spreads. I might be wrong or right but scalping should be a thing of joy to every broker. There are always different method of trading and we can always scalp to make good and profitable trade from forex.

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    Quote Originally Posted by Senorita View Post
    Since we all agreed that the major source of a broker income is through the spread, I see no reason why any broker will never like to encourage scalping knowing fully well that the more traders scalp in this business they more can earn from each spreads. I might be wrong or right but scalping should be a thing of joy to every broker. There are always different method of trading and we can always scalp to make good and profitable trade from forex.
    All traders will need to know that forex trading certainly is a good source of money. We will need to focus in here especially in making decisions first. Traders that possess a lot of good knowledge will know what they need to trade and then they can even start encouraging others in here first. But that might be a less common thing.

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  9. #9
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    one of the major thing that every trader should do before carrying out a trading agreement with any broker is to make sure that he is well familiar with their rules and regulation because brokers differs from one another and so do their regulation and orders too, so we may never be able to question any brokers reason if they did something we considered good for us if we do not understand their terms, i quite agree that a lot of things do happen between brokers and their clients.

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  10. #10
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    Quote Originally Posted by sekiryutei View Post
    All traders will need to know that forex trading certainly is a good source of money. We will need to focus in here especially in making decisions first. Traders that possess a lot of good knowledge will know what they need to trade and then they can even start encouraging others in here first. But that might be a less common thing.
    Yes it does not matter what we are applying in trading we have to do trade with proper knowledge and caring. For doing scalping it would be so much important do trade with a right broker, there are so many brokers who don't allowed scalping on the other hand there are so many broker's who who cheat with their clients when trader's start to do scalping with them exmaple, stop loss hunting. But I think robo forex broker is a good choice for all of them who want to do trade with scalping in forex.

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