These two words are often heard on the Forex market. Scalping and pipsing are the types of trading strategies used by forex traders. Scalping is used to benefit from fluctuations in currency movements on a given day. Such orders are carried out in a very short period of time, sometimes in just a few minutes. When you use this trading strategy, your income from each order can be very small. But the overall profit can be quite high because of the large value of these orders.
So, What’s the Difference Between Scalping and Pipsing?
Pipsing is considered a trading activity with a very short period of time, which usually only lasts up to 2 minutes. Scalping – short-term trading, which lasts 4-10 minutes. But the principle of these strategies is the same.
Scalping and pipsing are the types of trading strategies that traders use to benefit from fluctuations in currency movements on a given day.
Forex traders and carry out such orders throughout the day and at the end of the day. A level of 200 pips may be achieved. With fast closing of orders, under conditions of negative market influence. Scalpers (pipsers) try to reduce their losses, to get positive trading results. Where in it, the risk of loss is minimized.
Volatility in forex trading
Not a secret, Forex has great volatility. In a day, prices rise and fall within a certain range. Prices can exceed more than 100-150 points in a few minutes, in the presence of an important news release. Precisely because of the frequency of such changes, it is possible to increase profits. This kind of trading strategy is very popular among traders.
Beginners who do not have experience, who use this strategy think that scalping does not require special knowledge. But a trader must understand that every trading strategy requires knowledge and practice.
Lack of Scalping and Pipsing
If you use a Stop Loss, the placement will require a certain amount of time, which is needed for the scalping strategy, this will result in a delay that might reduce the possibility of profit.
Some forex traders see this as a refusal to place Stop Loss. But this method has the risk of losing profits. For example, in conditions of price changes in a direction that is not desired by a forex trader. If this condition occurs, correction of the price to the previous level may take a long time.
The thing that should not be forgotten is that pipsing is running a large number of orders in a short period of time. This requires maximum concentration from a trader on the chart and traces of market movements. If a forex trader does not have the level of reaction needed, he may not be on time when opening an order at the desired price. This will cause it not usually to receive the expected benefits. This situation applies equally at the time of closing the order.