Scalping seems to be a common strategy among experts, but some beginners are also interested in it. Newbies become interested in this strategy for one reason, which is, scalping is a potentially profitable trading style, and earning profits from this style is significantly more comfortable.
The way these guys think is absolutely correct, but the problem is one can earn money from this business style quickly, and at the same time, a wrong decision can ruin the entire trading account. Therefore, we recommend the newbies to advance slowly. Instead of jumping into real trades, they should learn utilizing the technical indicators at first.
New traders face challenges with this trading style because they have to make a decision within 15 minutes. Because of this short duration, scalping is considered the riskiest strategy you can use. There are many professional CFD scalpers who have made millions and have become so successful only because of their vast experience.
Requirements to be a scalper
There are a few things, which are needed to be a Forex scalper.
1. Mindset and psychology
Remember that if you don’t have the right mindset, you will hardly see the light. Psychology is a destructive factor in this industry. We suggest that you should not choose this strategy if you are unable to cope with the losses. Many traders can’t handle high stress, and this type of investor should avoid this plan. Read more about the professional trading environment at Saxo and design your trading method with low risk. This will significantly reduce the risk in trading.
2. A fast broker
If a newbie confirms that he is psychologically fit, he should search for a fast and experienced broker who can help him overcome any obstacles. Keep in mind that every movement of the pips is important in this strategy because it will indicate the profits or losses that investors are about to face.
3. Knowledge about the technical indicators
This is a vital issue for traders. No matter what happens, they must understand the way to handle and utilize technical indicators in the trading platform to predict the approaching movement of the industry.
Profitable trading strategies for the scalpers
As a scalper, there are a few strategies or indicators that can help you to be successful in the FX market.
1. Exponential moving average (EMA)
This is a kind of moving average, and it is considered a powerful strategy to realize the movement. Using this indicator is relatively easy and is one of the simplest ones. It will reveal the average direction of the currency’s price for a specific period. We suggest that you use two or three different periods to draw two or three different lines to figure out the perfect point at which to enter a trade.
It has been proved that when the existing market values stay over the exponential moving average line, then it is an excellent sell point. By contrast, when the existing market value goes beneath the EMA, it is a great time to buy currencies.
2. Stochastics and the trendline
Stochastics and trendline are excellent combinations if they are combined accurately. The stochastics will calculate whether the currencies are being underbought or oversold. If the value crosses 80, then consider it as an oversold currency. If the value stays below 20, consider it as an underbought currency. Using the trendline will reveal either whether the market is going up or falling. Find out the spot where the lines meet and where they have crossed each other. The crossovers can be used as a sell or buy signal.
These are the two most profitable trading strategies for scalpers. Before starting a career as a scalper, make sure you have good knowledge of the technical analyzing tools. Most importantly, don’t lose hope and stay strong. We again recommend using a demo account before a live one risking real money.