This article looks at forex trading strategies suitable for scalpers and how it should be used if you wish to trade in this fashion.
Determining the most suitable forex trading strategies is important when you make preparations to enter the live market. If you have the capacity to concentrate on one-minute charts and thrive in a fast-paced environment, then you should consider becoming a scalper. This forex strategy needs a personality who is able to make fast decisions and will not be fearful of suffering quick losses. If you cannot bear to make a decision without analysing the situation for hours on end, then you should steer clear of this strategy.
Your priority is to have a fast computer and a stable, fast internet service. The trading platform you intend using should allow you to buy and sell your position very quickly and with ease. If you can find a platform that offers you easy to use, quick select buttons, it would suit you better.
You should be fully aware of the terms and conditions offered by your forex brokers. To use this strategy effectively means that you have to be sure that your trades will be executed at the price quoted. Some forex brokers will offer you this type of guarantee, but will limit it to the slow periods of trading. Some brokers will not be prepared to offer a guarantee of this type. You do not want to have to absorb the costs of slippage. Slippage is when you place an order at a particular price level and it is executed a few pips from the point you set. As a scalper, you will not have the room to absorb these differences in price over and above the normal spread. It is for this reason that you need to find a broker that will guarantee your order execution at the level specified.
This is a way you can ensure against potential disasters. In the forex market it means that you have the facility to enter your trades and leave them in a variety of ways. The main factor that will affect this is having a stable, fast internet connection. In the event that you suffer interruptions in your internet connection, you should have a backup plan. One of these is to have the facility to place telephonic orders with your forex broker. It is extremely important though that if you have this manner as a choice, you should be sure that your call will be answered promptly. This may seem petty to you right now, but imagine you are in the middle of a trade and your internet connection goes down. You try to call your broker and there is no answer. All you can do right now is to imagine the depth of your frustration and your stress levels.
Forex Trading Strategies Chart Timeframes
To make concession for the fast trading that is required for this strategy, you need a trading system that becomes second nature. Scalping does not allow you to undertake detailed analysis of the market. This implies that you should devise a system that is suitable for everyday use and you should have confidence that it works. This means that you will need to work with short term charts. The most ideal charts for this purpose are the one or two-minute versions. Five-minute charts may also suit your purposes.