Is Scalping as a Trading Strategy Suited for Everyone?? - Page 51
Page 51 of 714 FirstFirst ... 4147484950515253545561101151551 ... LastLast
Results 501 to 510 of 7140

Thread: Is Scalping as a Trading Strategy Suited for Everyone??

  1. #1
    Trader
    Join Date
    Feb 2013
    Posts
    5
    Thumbs Up
    Received: 3
    Given: 0

    Is Scalping as a Trading Strategy Suited for Everyone??

    Is Scalping as a Trading Strategy Suited for Everyone??

    There is a great deal of confusion when it comes to the topic of scalping. The allure of fast paced trades, and even faster money is a great pull to new and experienced Forex traders alike. To determine whether we should be scalping or not we must first define what scalping really means. Scalping is the action of taking many short term intra-day trades with the intention of only holding the trade for a few minutes. Those who scalp the forex market may only look for a very small take profit, capitalizing on moves smaller than 20 pips more often than not. While this forex trading strategy may present many viable trading opportunities, is it really in our best interest to scalp the forex market?

    The Stress Of Forex Scalping Strategies

    Often a traders mental ability is the determination between a successful forex trader and one that ends up never mastering the art of forex trading. With this in mind it is important to eradicate as much stress from your trading as possible. One very simple way to do this is to take less trades by using slightly longer time frames. Taking fewer trades will allow you more time to process fully your reason for entering the trade, your trade management and finally your exit strategy.

    Forex scalping strategies at their very core rely on executing many trades per day. This fast paced trading style increases the level of stress a trader will experience exponentially. Not only are you forced to enter many trades per day, you are also in a position where these trades need to be closed quickly as well. For someone new to the forex market this is a recipe for disaster. This fast paced style leads to chasing markets, missing signals, and more often than not revenge trading.

    The Effect Of Spread On The Forex Scalper

    There is always a difference between the price you can buy a currency pair and the price at which you can sell it…this is called the spread. More often than not spread is never even a thought in the mind of aspiring forex traders. I use the word “aspiring”, as already profitable forex traders always take into account the effect spread has on their overall profit or loss. Let’s use an example to better illustrate the effect of spread.

    5 Trades Per Day X 3 Pip Spread = 15 Pips Paid In Spread Per Day!

    15 Pips Per Day X 5 Trading Days = 75 Pips Paid In Spread Per Week!

    75 Pips Per Week X 50 Trading Weeks = 3,750 Pips Paid In Spread Per Year!

    If we use 20 pip stops and risk 1% per trade that means every 20 pips we make or lose we will have gained or lost 1%.

    3,750/20 = 187.5% Paid In Spread!!!

    Is spread starting to become a little more important in your eyes? If you simply cut the amount of trades you take in half you will save yourself +93.75% or 1,875 pips! Now this is a very broad example of how spread can accumulate and cut into your overall profit but it illustrates a clear point of how spread can accumulate over the course of time. Spread is the cost of doing business as a forex trader, but like any other business we can cut costs and become a more streamlined business. Some companies use energy efficient light bulbs, as traders we “cut the light bill” by becoming more selective with the trades we take.

    Controlling Your Risk

    Our single job as a forex trader is to control risk. If you think about anything and everything we do it is done to control risk and eliminate it to the best of our ability. With that being said lets examine spread in relation to scalping. As an example lets say we bought the GBP/USD from 1.6000 with a 10 pip stop loss and a 7 pip take profit. If we are trading the Pound that means there is usually a 3 pip spread. Therefore in order for us to get filled at 1.6000 we would have had to have bought when the price (the bid) was at 1.5997 As a result the market would have had to only move 7 more pips down to hit our 10 pip stop loss. On the other side of the trade the market would have to move a full 10 pips to hit our 7 pip take profit!

    This is a very important point to think about. With the example above we are risking 10 pips to make 7. Not only that but the market only has to move 7 pips to hit our stop loss, while it has to move a full 10 pips to hit our take profit! The spread works against you all the time, but as you can see the smaller your take profit and stop loss the more of an effect a pairs spread will tend to have. Another way to look at that is the spread is actually 30% of the entire profit target. That’s like running a business with a flat 30% fee on top of every sale! No one in their right mind would open a business that operated like this, but yet many jump into scalping without giving it a second thought.

    One of the most simplistic ways of controlling risk is with a positive risk to reward ratio. Plain and simple, if you risk more than you look to receive on your trades you will eventually wipe out your account. There is no exception to this rule, it always comes true! A positive Risk/Reward ratio is something that is very difficult to achieve when scalping in the forex market because of spread.

    Breaking Your Scalping Addiction

    If you love to trade short term how can you still fill that desire but yet avoid the main pitfalls of scalping. First you need to understand that the satisfaction of turning a consistent profit far out weighs any rush you will ever experience from scalping. Our goal is to turn a profit and if the trading strategy we put to use is failing us, then its time to put it aside. I urge you to step back away from the charts and stop trading for a few days or a week. Give some consideration to the points brought forth here especially if you scalping is resulting in consistent loses.

    Not allowed!

  2. #501
    Trader cutiekc's Avatar
    Join Date
    Dec 2013
    Posts
    23,501
    Thumbs Up
    Received: 158
    Given: 236
    It is not even a good trading strategy I must say, because the success rate is really low and there are much people losing their money so therefore such a trading strategy to me is never a good one. Furthermore, I have got to learn that the more profitable one is the long term trading strategy which works more better and more effectively, so therefore I am more interested in making sure that I follow that strategy the better way.

    Not allowed!

  3. #502
    Trader
    Join Date
    Jan 2017
    Posts
    305
    Thumbs Up
    Received: 2
    Given: 1
    I think scalping as a trading system or strategy is not suited for every one because every trader has its own mode of trading, i personally do not like the scalping strategy and many traders i see they prefer to work on scalping system, but if you want to earn more you have to work on long term strategy..

    Not allowed!

  4. #503
    Trader
    Join Date
    Aug 2015
    Posts
    12,807
    Thumbs Up
    Received: 122
    Given: 24
    sami27: you are also right it is depend on every persons, some time it depend on time, interest, and investment also, in scalping also we need to use some good capital because we use big lot size mostly and capital should resist again some loss, so i think all people have own mind which can be differ

    Not allowed!

  5. #504
    Trader cutiekc's Avatar
    Join Date
    Dec 2013
    Posts
    23,501
    Thumbs Up
    Received: 158
    Given: 236
    Quote Originally Posted by naeem555 View Post
    sami27: you are also right it is depend on every persons, some time it depend on time, interest, and investment also, in scalping also we need to use some good capital because we use big lot size mostly and capital should resist again some loss, so i think all people have own mind which can be differ
    But when you look at things you will see that a lot of traders who are scalpers have been losing their money, what I am trying to say is that there are more people losing in scalping and the success rate is low. Though I know that all trading strategies works, but then I still get to know that there are some that don't worth the trying.

    Not allowed!

  6. #505
    Banned
    Join Date
    Sep 2013
    Posts
    26,777
    Thumbs Up
    Received: 289
    Given: 50
    Quote Originally Posted by cutiekc View Post
    But when you look at things you will see that a lot of traders who are scalpers have been losing their money, what I am trying to say is that there are more people losing in scalping and the success rate is low. Though I know that all trading strategies works, but then I still get to know that there are some that don't worth the trying.
    Scalping in the market is always about losing annd winning, but the scalping might make traders to be more emotional and frustrated, and thereby be making more trades, and before he would know it, he would have most all his money, but with the traders that knows it, they will only be making money because they have their plans with it.

    Not allowed!

  7. #506
    Trader
    Join Date
    Jan 2017
    Posts
    650
    Thumbs Up
    Received: 2
    Given: 13
    Yes scalping is a good stratgy but make sure which plan you made follow them like if you are a scalper then you will earn small pips and cut losses for small pips , some trader make trade as a scalper and hold bad trade and in the end they will face losses ,so they blame scalping so don't break your rules for making trades.

    Not allowed!

  8. #507
    Trader musiliu's Avatar
    Join Date
    Jan 2017
    Posts
    2,119
    Thumbs Up
    Received: 8
    Given: 3
    scalping strategy is not suitable for every one and should be only considers by traders that are sure of enough self discipline and fast decision taking, scalping strategy needs a lot of discipline because you will be exiting profiting trades after very few pips and then you should be able to resist the urge that will tell you to leave the trade open for a much more pips.

    Not allowed!
    Always have realistic DREAMS!

  9. #508
    Registered user
    Join Date
    May 2014
    Posts
    3,655
    Thumbs Up
    Received: 27
    Given: 8
    [lang=id]
    Quote Originally Posted by musiliu View Post
    scalping strategy is not suitable for every one and should be only considers by traders that are sure of enough self discipline and fast decision taking, scalping strategy needs a lot of discipline because you will be exiting profiting trades after very few pips and then you should be able to resist the urge that will tell you to leave the trade open for a much more pips.
    Scalping strategy indeed is very important because if we did it without any cautious approach then we will only loss a great deal of money as the result too. We need to always made a fast decision in trading so that we can avoid the risk too if possible. Scalping need to be carefully watched with the risk so we can earn with lesser impact to our own money.[/lang]

    Not allowed!

  10. #509
    Trader
    Join Date
    Aug 2014
    Posts
    3,452
    Thumbs Up
    Received: 10
    Given: 9
    Quote Originally Posted by Vicko View Post
    [lang=id]
    Scalping strategy indeed is very important because if we did it without any cautious approach then we will only loss a great deal of money as the result too. We need to always made a fast decision in trading so that we can avoid the risk too if possible. Scalping need to be carefully watched with the risk so we can earn with lesser impact to our own money.[/lang]
    A good trader always operate trade by applying or adopting a good strategy and with some target,so that they can make a good plan to make there trade well. By this way trader can earn some good profit form there trade and its also helps them to operate trade more meaningfully and avoid emotions.

    Not allowed!

  11. #510
    Banned
    Join Date
    Sep 2013
    Posts
    26,777
    Thumbs Up
    Received: 289
    Given: 50
    Quote Originally Posted by MIGHTYRAMESH View Post
    A good trader always operate trade by applying or adopting a good strategy and with some target,so that they can make a good plan to make there trade well. By this way trader can earn some good profit form there trade and its also helps them to operate trade more meaningfully and avoid emotions.
    Good traders will handle trading indifferent way, but will still have the same goal at the grasp of the trader. In the way like this, it is better for traders to make sure that they handle the scalping with good management and plans, they should never trade it near emotion, and make sure that they have their stop loss fixed with it.

    Not allowed!

Page 51 of 714 FirstFirst ... 4147484950515253545561101151551 ... LastLast

Tags for this Thread

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •