Monday, July 19, 2010

Scalping strategy

Many traders prefer scalping strategy because of its simplicity. The strategy concept is in taking a small amount of pips (1-10) per trade, whether it's profit or loss. It is necessary to catch a micro wave and trade on it.

This strategy is also based on intuition and needs a lot of practice. When you could feel what will be the next step of the market then you're ready to trade this way.

However, there are a few problems with scalping you can face and they all depend on your broker.

First of all you need a good broker which can open you trades in less than a second. There should be no requotes and spread should be very low. It is better to have fixed spread because if you trade on news spread can be more than 10 pips and this is definitely is not what you need.

In the end, you need to have fast and stable internet connection.

You need to test your skills in scalping on demo account on silent market and during release of major news. If you could make stable profit then open a real account and test your broker once more. There is a possibility that on real account you would face new problems because brokers don't like scalpers. If your trading would go smoothly you can higher your lots. If not, try another broker, there is a plenty of them.

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