A scalper is a term for forex traders who tend to collect a small amount of profit (scale of 5-10 pips) by using the strategy of open and close positions quickly and repeatedly every day. In contrast to a Day Trader who may only take two to four open positions in each day, a scalper usually opens positions up to dozens of times each day to achieve profit targets.
Basic Knowledge of the Scalping System
According to Investopedia, scalping is a trading strategy that attempts to make many profits on small price changes. However, the practical definition can vary between traders. There is a definition of scalping as short-term trading, which closes in less than a few minutes There is also a definition of scalping as a way of trading that takes profit only a few pips, but while applying large lots per position.
Whatever practical definition is applied, the scalping system cannot be carried out by just any trader. A scalper must be constantly sitting in front of the computer, and they must enjoy the pressure in the face of chart movement. A scalper requires high concentration in observing the slightest chart movement. It takes a strong mentality and fast reaction to be able to open and close positions when the trade moves as you wish or instead shifts in the opposite direction.
Here are the tricks and things that need to be prepared for the scalpers:
- Choose a broker that allows full scalping
This needs to be considered because there are indeed some brokers who limit or even prohibit the use of this technique.
- Trading Platform execution speed
Because the speed in this execution will determine whether your position is executed or not (requote). It is best to do a platform test through a demo account first if you are not familiar with the execution of a broker.
- Choose currencies with small spreads
Choosing a currency with a small spread will help boost your profitability, while brokers with large spreads will complicate scalper efforts for profit. Also, avoid brokers who apply high commissions.
- Choose a broker that uses a 5-digit price quote
Even if you don’t have to, you can consider it because it will shape your profit execution.
- Good internet connection
To trade repeatedly, you must ensure that the internet conditions you use are strong and stable enough. When your internet is down, you need to know what to do to fix it quickly.
- Monitor 2-3 charts at once
Use a chart at a time frame of 15 or 30 minutes to estimate trend movements, then use a 5-minute time frame to open or close a position.
- Choose the right trading time
The Asian session is suitable for scalpers. But some scalpers are eyeing for the time before the opening of European and American sessions. At these hours, the trading volume that occurs in the forex market increases quite large.
If you want to become a scalper, you must pay attention to the broker you choose. Don’t choose a broker carelessly because the broker will have a significant effect on your trading. You can use My FX Book as your broker that will support your trading success.
Read more: The Problem with Most Forex Brokers
