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The following guest post is courtesy of freelance writer Dwayne Buzzell.
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The Forex market is similar to stock market. Here you buy and sell your currencies in your online trading account. If you are impatient and cannot hold on to make your profit, you may have thought about Forex scalping. It is short time trading where traders make their trades on the market, and close it on that day. Scalping in Forex is risky and yet many traders are professionally scalping the market. The advantage of Forex scalping is that you do not have to watch the market movement for the full day. You place your trades on the market and you forget about it. New traders often think of scalping in the market to make more profit. It uses a short timeframe and they think it will take less time to grow profit in their account. Forex scalping takes much time before you can successfully make a profit in your account by trading in this minute timeframe. Only experienced traders can scalp the market.
Short time frame trading
This scalping is done in a short timeframe and it needs a trader who understands the market. You have to know and analyze the market picture from these minute timeframes. It needs all your experience and knowledge. This market is large and traders cannot make money for the first few years. They lose their trades and keep on learning. The traders that you are seeing successfully scalping the market are the most experienced traders. They have spent much time and have dedicated their life to understanding the Forex from these simplest timeframes. They do not need time like other traders, as they have already understood how the market works. Forex scalping in Forex is risky, but it can give you profit in a short time. The cost of scalping is your time and knowledge about the market. However, when you execute high lot size in your online trading account, make sure that you are not risking more than 3 percent of your account capital in single trade. Always follow proper risk management factors to reduce the risk exposure in trading.
Price action trading strategy
Price action trading strategy is very simple and it is considered to be one of the best ways to trade the live assets in the market. If you look at the professional traders, you will notice that every single one of them is using the reliable candlestick pattern to trade the key support and resistance level in the market. It is true that executing high-quality trade setups in your online trading account at the initial stage will be extremely difficult for you, but if you trade with patience then within a few months you can master the art of a scalping trading strategy. The forex market becomes extremely volatile during the high impact news releases, so make sure to reduce the lot size during high market volatility.
Conclusion: We do not say you should not scalp in Forex. If you have spent many years on the market and want to try out scalping, then try it. Your knowledge will tell you if you can make profit. Every trader has their chance in making money in forex, and you should not waste your chance by following other traders who trade the market with this scalping strategy. If you can slowly make a profit with your strategy, you should probably use your strategy and not scalp in Forex.