Scalping can be a good way to make money. Still, it is hard, but in this guide, I will teach you more about it.
Remember: this guide contains ideas and information based on my experience. There is no one correct approach to scalping. Other traders may use a different set of tools, different strategies. You are responsible for your trading results. You have to take all that knowledge and test it on demo account or with smaller position size.
Goal of this guide
The main goal is to teach you about scalping. I want you to build (and test!) your own strategy based on information from this post. Remember, scalping is much more than set of technical indicators. You need a complete strategy with money management, position management, rules of entry and exit. I will try to teach you all that things.
Basic info about day trading:
- Forex scalping and day trading for beginners
- Best Forex broker, fx pairs, trading hours for scalping and day trading
- Day trading Bitcoin
- Forex scalping and day trading without indicators
- Time frames in day trading
- Trading desk
Management in day trading:
Indicators in day trading
- Forex ATR – trailing stop loss
- Forex Parabolic SAR
- Moving averages
- Bollinger bands
- Fibonacci retracement
- Support and resistance, Pivot Points
Oscillators in day trading:
About forex scalping
There are some disadvantages when it comes to forex scalping:
- If you are scalping without EAs then you have to be in front of the screen most of the time.
- Sometimes there is very little time to make a decision.
- You have to follow the news, be ready to react to some unexpected news.
- You invest with bigger leverage so it is much easier to lose money in a short time if you do not follow your trading plan and don’t cut losses fast.
But there are also good sides.
- You do not close any positions over the night. You finish the day and you know how you did.
- If you have a good strategy which is based on technical tools then you can automatic the whole strategy or part of it.
- You can make big money in short time.
- You can trade few hours per day (not always, but possible) for example during time with the best volatility.
Scalping is not for everyone, but when you have a good discipline then it can be a good choice.
Forex scalping or long term
Both are great ways to trade and make good money. Form many years of my experience I can say that in long term trading you have much better chances to be profitable. The old truth is that the more you spend in front of chart more chances to make mistakes. With long term, you open a trade based on your entry criteria and you wait. You can keep trade open for few weeks or months or even longer.
It is not easy with scalping. It is a constant fight with you, with your emotions. And it is so much easier to lose money than let’s say by long term investing in stocks.
So yeah, for most people long term is a better option. There are many demo accounts. You can try your strategy and see if this is for you.
Forex scalping vs swing trading
Similar to long term, swing trading is also a better choice for most traders. In swing trading, especially on higher time frames, you can catch some really big moves. It doesn’t require you to be most of the time in front of a screen.
Scalping on Forex vs Dax, SPX, and futures
I prefer scalping on Forex. Markets are open longer (5 days per week x 24h) and it is easy to trade with even really big positions.
There are some other factors to consider.
I would say that there is more automated trading in Forex so it can be harder to trade. Also, in Forex you have pairs. You have to watch for news for both of them.
Still, it is possible to mix scalping and swing trading but it is recommended for people who mastered swing trading in a first place.