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What Is Scalping?

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Another well-known and also very frequently used Forex strategy is scalping. Scalping is characterized by the rapid purchase and sale of foreign exchange.

Scalping enjoys increasing popularity

Scalping is a trading technique that is becoming more and more popular, with an upward trend. The problem is that due to the increasing popularity more and more traders take notice of it, try scalping but fail at it. Therefore, scalping is then simply left to the left. But this is a pity, because with this technique a good ratio of profit and risk can be achieved. This means that profitable returns are possible at low risk. Always provided, of course, that this technique is really well mastered by the trader. The principle of this technique is that the trader does not speculate on a big profit with one trade, but makes as many small trades as possible, which all bring smaller profits.

Scalping in practice

The scalper recognizes after the technical analysis which price will rise in the next minutes. He buys the currency pair and sets a tight stop loss of ten pips. Now the rate actually rises by the five pips expected by the scalper, the spread is two pips, so the trader has a profit of three pips and he closes the position right away. The scalper repeats the whole thing several hundred times on some days.

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Risk Warning

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. Between 74-89% of retail investor accounts lose money when trading CFDs. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. Trading with financial products (CFDs, Forex, Stocks, Cryptocurrencies, etc.) in general and with leveraged products especially is highly speculative and not suitable for all investors! The loss of your entire investment is possible. Never invest money you can`t risk losing! Decentralized and not regulated cryptocurrency markets are also a high risk and may lead to a significant loss.

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