Scalping

Scalping

It is one of the most popular forms of trading, especially among newcomers. It is a fast-paced, mind-rattling, and an adrenaline-inducing type of trading.

The main objective of scalping is to rush into the trade at the busiest hours of the day, grab a very small amount of pips and exit the market immediately. While the gains from the single trade might be limited, а trader can increase his returns by executing dozens of such trades throughout the day. But the scalper must always know where to stop as overtrading may quickly erode the account balance once he/she steps into a bad streak.

The key advantage of this trading style is high potential returns (well, if you’re quick and dexterous enough to execute your trades in a very short period of time). Leverage allows scalpers with modest amounts of initial resources to reap greater gains, but you should beware of substantial losses you might suffer while using leverage improperly. One pip in your favor may bring you lots of money with the leverage. In contrast, a pip against you may result in great losses. So, it is hit or miss type of trading.

Scalping doesn’t suit those who are not used to trade in a high-risk environment.

This type of trading demands the in-depth knowledge of your trading platform; you shouldn’t give too much thought to operational procedures; you should be fully concentrated on the movement of the price.

Example of a trader

Paul-Rotter.png

If you set your heart on scalping trading, you might be interested in getting professional advice from the most successful scalper of all times – Paul Rotter. This trader reportedly made $65-78 million per year over 10 years scalping the most liquid contracts at the Eurex.

“I was always the guy who traded a lot, sometimes up to a 100 trades a day. I'm only looking for the next 3-5 ticks”, avows our scalper.

What did he do to avoid overtrading? He simply set daily goals for his profits and losses. Before rushing into trade, he used to define the stopping limit, the maximum loss he could take per day. He took quite risky positions, but when they started going against him, he mercilessly closed them. He always said: “As a trader, you should have no opinion. The more opinion you have, the harder gets it to get out of a losing position.”

In contrast, during his was winning phases he was getting truly aggressive; he took bigger risks and scaled back in losing times only. Sometimes it is truly difficult to do so. So, Paul Rotter tried always to have somebody by his side, a neutral, who could force him to switch off his terminal once he reached the stopping limit.

His trade is not directionless, he bases his decisions on through analysis of the markets. Before opening the terminal, Paul Rotter tries to check all the economic reports that are about to be released, speeches of influential political figures and central bank governors – anything that may influence the direction of the price – until he gets a clear picture of the market.

Popular

America will probe German and Japanese car makers over alleged patent violations

America’s on the verge of starting an investigation into whether thermoplastic components utilized in some Japanese as well as German vehicles sold in the country violate its patent laws or not…

Gold edges down toward 3-week minimum after Congress hits spending deal

On Monday, gold headed south in European trade, making its way toward a three-week minimum after American congressional leaders came to an agreement to fund the government via the fall, thus easing worries as for a shutdown of the federal government…

Crude edges down in Asia on Caixin PMI

On Tuesday, crude prices traded weaker because a poll on Chinese manufacturing came in weaker than expected and market participants looked ahead to American inventories on oil as well as refined products to set the overall tone…

Deposit with your local payment systems

Callback

A manager will call you shortly.

Change number

Your request is accepted.

A manager will call you shortly.

Internal error. Please try again later

Beginner Forex book

The most important things to start trading
Enter your e-mail, and we will send you a free Beginner Forex book

Thank you!

We've emailed a special link to your e-mail.
Click the link to confirm your address and get Beginner Forex book for free.

You are using an older version of your browser.

Update it to the latest version or try another one for a safer, more comfortable and productive trading experience.

Safari Chrome Firefox Opera