FOREX SCALPING STRATEGY

Forex scalping is a trading style which looks to take profits on very small price changes, usually soon after a trade has been entered into and becomes profitable. It is a trading strategy that does not look to capture 50+ pip moves, rather it is more about watching the price action and getting in and out of trades for quick 5-15 pips which little by little add up.

This might sound risky however scalping can be quite a low risk strategy if performed correctly. As you are aiming to profit from a lot of small movements, the downside risk should be similarly kept to a very tight range. A strict exit strategy must be implemented because one large loss could eliminate the many small gains that you have worked to obtain. Needless to say, discipline to get out of bad trades and risk management is extremely important and if implemented properly, intra-day forex scalping strategies can be done at low risk.


Forex Scalping - The Problems

There is a problem with scalping however as most dealing desk brokers are aware of this practice and don’t look too kindly upon it. This is because if they allowed scalping of - in and out of a trade in seconds - they would go out of business. The reason for this is because they need time to use a dealing desk so if you are scalping (less than a minute) they dont have the time to deal your money. Basically you are just taking their money.

How Do Brokers Differentiate Scalping From Short Term Trading?

It is a very thin line between scalping and short term trading. Generally if you hold trades for a minute or less, you may have problems with brokers. They could warn you and then if you continue shut down your account. However, if you trade in minutes or more, most likely you will not have problems with dealing desk brokers. Non dealing desk (ECN) brokers allow scalping where you can hold a position for seconds however the minimum to open an account is higher. ($2,000 and above).

Forex Scalping Strategy

Obviously, it's possible to make money scalping the forex – if not the brokers wouldn’t care so much. However, to be successful, you really must know what you are doing (especially in terms of having a strict risk strategy). You will also need to find a scalping system where you stay in positions long enough not to break the brokers rules while at the same time stay within your own risk tolerance parameters.

We recommend the forex scalping method of Watts Trading Group because it fits the above criteria as well as the following:

- The rules of the system are outlined very clearly. Both entry and exit.

- The scalping technique is simple and easy to follow.

- Strict risk and money management rules are defined.

- Ongoing support is provided through a Live Trading Room and traders are given free audio tools to learn how to get the edge on the psychological aspects of the trading game.

In essence, the forex scalping strategy of Watts Trading Group is a defensive trading method based on risk management. You will be learning to take small profits and discovering risk management techniques to win more consistantly and frequently. Excellent psychological tools are included as well - you will be extremely surprised at just how useful these things will be in your future trading.
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