Forex Scalping – Good or bad Idea?

By | September 20, 2016

Why is scalping in Forex so popular?

Scalping is a very popular trading style for many traders. It promotes fast trading, meaning, as soon
as a rather small target profit is reached – you must exit the trade. Scalping can be a very powerful
trading style for those who know how to do it properly. For those who don’t – there are a lot of scalping
indicators, however not all of them are working as intended…

What makes scalping different from other forex trading styles?

Well, scalping allows you to take advantage of many different price movements that happen throughout
the day, rather than focusing on big long trend than can sometimes take days or weeks. Fast profit and less
time investment are the key benefits of this method.

Are you the type of person who would benefit from scalping?

There are billions of people on out planet and everyone has a different character, preferences, hobbies etc.
However we can still logically divide all people into a specific groups. So, if you are curious to know
whether you belong to a group those who can benefit from scalping – see if at least one of these points
sounds attractive to you:

1) You prefer to trade safely, without too big investments. More often and safe trades are “your thing”

2) You think winning a lot of small low-risk trades is more fun that winning one big with higher risk.

3) You prefer to be in control over each small fast trade rather than place one big trade and check back
on it every now and then.

4) You don’t have enough time to trade for hours a day and prefer to execute 2-3 fast trades with a cup
of coffee before going to your job.

Results! So if you answered “yes” to one or more of the points above, then most likely scalping is the
right trading style for you. Congratulations on learning this now 🙂

2 thoughts on “Forex Scalping – Good or bad Idea?

  1. Michel

    Thank you Karl for pinpointing why one is intuitively attracted to scalping.
    I can agree with some points, not with others.
    – Less capital needed: true. A shorter TF (M5) means smaller SL (10 pips) distance.
    But small capital means small gains.
    Example: 5K capital. With 2% rule on risk and 10 pips SL, 1 pip = 1 USD; hence 1 minilot investment allowed.
    A zigzag analysis with 10% drawdown will show that the average trade size with M5 is +/- 5 pips.
    My broker charges 1…1,3 pips spread on €/$ during active sessions + 0,7 USD commission for a minilot= 2 USD per trade; average net earning per trade is then 5 – 2 = +/- 3 USD. Hence “a couple of trades before going to work” is not realistic.
    For me , this kind of trading (M5 Scalping) requires :
    – 50K capital to make 50 – 13 – 7= 30 USD USD per winning 5 pips, 1 lot trade
    – full time presence between 8-10 and 13-17 GMT until you make 10 winning trades + double the amount of loosing trades to cancel their losses. With 30% loosing trades that makes an extra 6 trades. Total +/- 20 trades per day to make a decent 300 USD earning over one day = 6.000 USD/month.
    My questions:
    – Do you agree with me?
    – How many hours of presence do you estimate to be required to make 30 M5 trades?
    Thanks for the fantastic programs you develop.

    Reply
    1. Karl Dittmann Post author

      Good points… I think you can make 30 M5 trades in just 1-2 hours a day. You dont have to be chained to PC
      all day. Just use signal alerts.

      Reply

Leave a Reply

Your email address will not be published.