The term definition of Scalping sometimes varies between forex traders and other forex traders. Some interpret that scalping is trading with a short time in a few minutes immediately close. While others say scalping is taking profits only around 1-5 pips no matter how much time is needed.
How do you forex trade scalping?
By only taking small profits, scalping traders have the view that getting a small profit but is more consistent is easier than looking for tens of pips in a single entry position. Just imagine, scalpers are able to get pips many times more than traders who only have one position a day. This requires high skill and precision if you want to use scalping techniques.
Scalpers usually use large lots when open entry. Because their target is only a few pips. A scalper trader usually uses short time frames, such as M1 and M5. But not infrequently there are also scalpers who use the M15 and 1H time framesas a big picture of the trend. When a daily trader opens 1 position and targets 50 pips with lot 0.1, that means the result = $ 5.
Differentiate from scalping which uses lot 1 by only targeting 5 pips. The result is the same as the daily trader who opens one position. The advantage of scalpers is that they are able to open more positions than daily forex traders.
Scalper forex traders
Scalper traders are also very dependent on brokers who have the smallest spreads. Because the smaller the spread offered, the greater the profit they get.
The disadvantage of a scalper type forex trader may only be based on the risk. Because more and more open positions, the more risk for loss. So that’s why scalper traders have prepared themselves mentally, that is, they don’t use stop loss. This means that their stop loss is their margin call.
But behind that, for scalper forex traders this is not a problem because they have many opportunities to gain multiple profits compared to long-term traders.
How about you? Are you interested in this scalping trading method and try to be a scalper? before you try scalping, it’s a good idea to look for or try scalping forex strategies that you can backtest. What is certain before becoming a scalping forex trader, prepare your mentality first.