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Thread: FX Dictionary: SCALPING

  1. #1
    nicky2k
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    Question FX Dictionary: SCALPING

    I came across the termin "scalping", could not qite understand what it means, if someone cold shed some light on the subject, it would be greatly appreciated!

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    Denis Peganov, FXOpen Development Director cool user FXOpen Manager's Avatar
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    Quote Originally Posted by nicky2k View Post
    I came across the termin "scalping", could not qite understand what it means, if someone cold shed some light on the subject, it would be greatly appreciated!
    Scalping is a technic which is used for big amount of the traders. Positions are opened for very short period of time and for very small targets from 3 to 10 pips and amount of positions is very high. Scalping is one of the most profitable and most risky strategyies in Forex trading.

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    In Profit moneydeep's Avatar
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    Why would you consider this risky?
    Can't one switch from scalping strategy to a longer term one after reading the charts carefully.

    Say for example a person sees gbpchf is going to rise in the long term. he buys a lot and if he sells it for a small target as you said 3-10 pips he it becomes scalping. But if it starts going down after he has bought he can change his strategy for the long term and it will not be scalping anymore.
    So it's not that risky
    Am I correct? Admin?

  4. #4
    nicky2k
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    Quote Originally Posted by moneydeep View Post
    Why would you consider this risky?
    Can't one switch from scalping strategy to a longer term one after reading the charts carefully.

    Say for example a person sees gbpchf is going to rise in the long term. he buys a lot and if he sells it for a small target as you said 3-10 pips he it becomes scalping. But if it starts going down after he has bought he can change his strategy for the long term and it will not be scalping anymore.
    So it's not that risky
    Am I correct? Admin?
    well, you see, in scalping one invests large sums for a short period of time, the risk is that if one does not read the chart carefully, and misinterprets the trend direction, then one could loose big time, since he invested a large sum, and large sum makes large minus!

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    Quote Originally Posted by nicky2k View Post
    well, you see, in scalping one invests large sums for a short period of time, the risk is that if one does not read the chart carefully, and misinterprets the trend direction, then one could loose big time, since he invested a large sum, and large sum makes large minus!
    Yes I get what you say. But if one has read the charts carefully and has decided to do scalping if it starts going down he can wait until it rises because he knows its going to.

  6. #6
    nicky2k
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    Quote Originally Posted by moneydeep View Post
    Yes I get what you say. But if one has read the charts carefully and has decided to do scalping if it starts going down he can wait until it rises because he knows its going to.
    Well, you see my friend, if someone is scalping, then defenately he is investing more then 1% of his account worth (otherwise how much will he get from 2-3 pips?). And when you invest more, then you don't have that leverage that allows you to wait through those "down times"... Basically, if you are scalping, your chart reading better be accurate and if you misinterpret the direction of your trend - you are in loss big time!

    I guess that's why they say that scalping if very risky!

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    Quote Originally Posted by nicky2k View Post
    Well, you see my friend, if someone is scalping, then defenately he is investing more then 1% of his account worth (otherwise how much will he get from 2-3 pips?). And when you invest more, then you don't have that leverage that allows you to wait through those "down times"... Basically, if you are scalping, your chart reading better be accurate and if you misinterpret the direction of your trend - you are in loss big time!

    I guess that's why they say that scalping if very risky!

    Well yes that sounds right. So you mean the term scalping can only be given to a person who does this with large amounts of money?

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    Quote Originally Posted by moneydeep View Post
    Well yes that sounds right. So you mean the term scalping can only be given to a person who does this with large amounts of money?
    Well, scalping is technically going for small amounts of pips in short time periods no matter the amount of money involved. However, most scalpers are greedy so they use as much margin as their leverage will allow.
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    Yes and one little mistake will send their hard earned account to the dust. It's better to deposit a lot of money and trade long term....less stressful

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    say if someone is starting to trade with the $25 bonus he gets I would think that scalping would be his best option

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    Well mahanidhi, if one has ONLY 25$ bonus, then scalping is his ONLY option... I belive that even with leverage of 1:500 one can't afford to take swings and go long term...

    So, if you have no cash, and really desperate to make some and you are a good and experienced trader, then start scalping, make a starting capital, and trade for real... well, that would be the ideal dream... the reality, well, I dunno...

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    Scalping rules.. and thats all I do in demo account. I get all freaked out when i am in profits say $8-10 in 0.1 lot trade and I close as soon as I see red in th 5 min chart.

    I guess this is wrong and I am going to try analyse the charts and learn to go long term

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    Quote Originally Posted by mahanidhi View Post
    Scalping rules.. and thats all I do in demo account. I get all freaked out when i am in profits say $8-10 in 0.1 lot trade and I close as soon as I see red in th 5 min chart.

    I guess this is wrong and I am going to try analyse the charts and learn to go long term
    well actually nothing is wrong as long as you make a profits.
    But what you do is risky.
    Better read chars more carefully and in cone go you can make over $100 with the $25

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    Quote Originally Posted by MAXpips View Post
    well actually nothing is wrong as long as you make a profits.
    But what you do is risky.
    Better read chars more carefully and in cone go you can make over $100 with the $25
    Just don't get frustrated when you start to read charts, you're losing more than before you learn to read them.
    And the more indicators you learn the more losing trades you have...

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    Quote Originally Posted by fireflies View Post
    Just don't get frustrated when you start to read charts, you're losing more than before you learn to read them.
    And the more indicators you learn the more losing trades you have...
    I don't qite understand your point. YOu mean that the more you know, the more you loose?

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