Forex scalping requires a completely different mindset to other forms of day trading. Those who engage in Forex scalping normally make a number of trades a day taking somewhere between 5 to 10 pips from the market each time in many cases. Of course, the more trades that are made, the higher probability the scalper will have losses.

Develop Recognition Skills

Why Forex Scalping Methods Should Be Part Of Your Overall Strategy

There is always the possibility price will breakout at that point in which case it will be a losing trade. That’s why it is important to maintain tight stops, perhaps no more than around 15 pips to keep the profit/loss ratio within reason.

Whenever the trader opens a chart, key support and resistance levels need to be identified. Previous highs and lows should jump out at the trader and be quickly recognized and identified.

The main principle that governs Forex scalping is the same principle that applies to all forms of day trading:

Hence the need to exercise discipline and not shoot at everything that moves. Look for only high probability trades. This however is easier said than done. That is why the following piece of information is critical in understanding market behavior from a Forex scalping point of view.

posted by Administrator at 4:07 am & filed under Currency markets |