WHAT IS FOREX SCALPING STRATEGY? HOW TO APPLY SCALPING STRATEGY IN FOREX MARKET?

The idea of trading forex has raised a question of whether traders can make multiple trades in a certain period. In fact, all traders want to increase chances of making money in forex since forex market is considered to be one of the most profitable markets in the world. In order to trade more effectively and quickly, scalping strategy can help you address this matter. 

Why do we need to use scalping strategy?

This question can be answered easily because scalping strategy allows every traders to make multiple transactions during a certain time. No matter where you learn forex trading, there are three features we should take into consideration before applying this strategy. All of which are small profit margins, high leverage, and short positions. It is conspicuous that the ultimate purpose of using this method is to gain big profit. Therefore, scalpers endeavor to utilize price gaps which bring them chance of getting money. 

Once you desire to capitalize on this strategy, what you need to do is to choose some technical indicators. The only reason for doing this is that you can determine exactly the occurrence of price gaps. It is advisable that you should invest a big capital in scalping strategy as it allows you to optimize your strategy. In addition, you will be able to decrease trading cost when you open or close bigger positions. 

Is it easy to launch one-minute scalping strategy?

It can be seen that the scalping strategy is quite advantageous because it uses a short-term period of time. The strategy is specifically designed for those who want to make profits with smaller margins. Speaking of scalping strategy, it can be really utilitarian for someone who can make wise decisions in a short time. 

It is obvious that you need to take details into account regardless of any type of currency pair. Basically, scalping happens within 5-20 minutes increases of price. Nonetheless, you had better pay much attention to indicators, time chart, movements of price when you want to conduct one-minute scalping method. 

If you want to make the most use of this strategy, it would better for you to recognize changes of price. In fact, you might not gain big profits when applying this strategy. 

How do we choose indicators for scalping strategy in forex?

Is it the fact that you will focus mainly on volume indicators and candlestick charts when starting this strategy. It would be easier to make rational decisions since the strategy provides scalpers with effective tools. Using technical indicators is a must for traders due to the fact that scalping involves in analysis. 

Now, we will look at some technical indicators

  • Bollinger Bands includes a wide range of price changes which enables scalpers to recognize the occurrence of breakouts and trends. 
  • Relative Strength Index is mainly designed for controlling risks. It basically helps traders determine strength on a scale. 
  • Moving Average Convergence Divergence allows you to balance moving average. You will be able to trade anytime. 
  • Exponential Moving Averages allows you to identify the exact movements of price. 

In one word, launching scalping strategy can be really helpful, but you need to care much about its characteristics. In order to take advantage of this strategy, it requires you to loot closely at aforementioned aspects. I hope that you will know how to start using scalping strategy after reading this article. Next, learn how forex brokers make money.