BUY FXO Forum Shares
1316
Shares in the BANK:
We BuyWe Sell
$1.7638$1.8183
Results 1 to 6 of 6

Thread: Tell Me About Forex Scalping

  1. #1
    Bullish
    Join Date
    May 2007
    Posts
    86
    FXO Shares
    0
    FXO Bonus
    0.000
    Thanks
    0
    Thanked 0 Times in 0 Posts

    Default Tell Me About Forex Scalping

    Trading on the Foreign Exchange market, or Forex, has become increasingly popular due in no small part to its sheer size and volume of trading. There was a time when only the large investment banks and other "institutional" vehicles of finance could play in the currencies market but now it is possible for just about anyone to invest in the Forex. Just as with equities or commodities traders, investors in the Forex need some type of strategy when deciding on currency pairs and when to enter and exit a position.

    Scalping is one of many Forex investment strategies and at its simplest involves anticipating short-term movements in the exchange rates. Forex scalpers are like the polar opposites of those who use the buy-and-hold approach because they are only looking to enter and exit a position quickly--make their profit and run. Scalpers may only hold a position for a few hours--and in the extreme cases--or mere minutes. These "hit and run" investors look for market indicators specifically known to affect rates on the Forex. National and international news events have been shown to affect currency exchange rates. In truth, the Forex trades 24 hours a day with investors all having access to real time pricing changes. Thus, a Forex scalper may only have a few minutes to enter and exit a position before the market corrects itself and factors the news into the pricing. Scalpers use key indicators to help them anticipate the price fluctuation, such as:

    GDP - Gross Domestic Product Unemployment Inflation Trade balance Interest rate announcements Consumer/business confidence surveys Retail Sales

    Government statistics tend to be more valuable to Forex scalpers for a couple of reasons. First, the U.S. dollar backs nearly 90% of all transactions on the Forex so any economic data released about this key nation will likely have some affect upon the exchange rates--at least temporarily.

    Secondly, U.S. government statistics are considered to be some of the most reliable and accurate data that investors can get their hands on. Plus, the real benefit to scalpers is that government data are supposed to be well-guarded secrets meaning that all investors--big or small--are made aware of the same information at the same time. Because small retail Forex traders are able to raise and move capital faster than larger institutional investors, they should have the advantage when it comes to taking advantage of short-term movements in exchange rates caused by the release of new information.

    However, it is important to understand that a Forex scalper only profits if they can actually anticipate how the market will react to the information. For instance, if an investor had a position in the USD/EUR currency pair, they might be tempted to believe that the dollar should rise relative to the Euro if the U.S. had a higher rate of GDP growth in the 4th quarter. However, the dollar might actually fall based on this information if the U.S. economy grew at a slower rate than predicted--even if this rate was still higher than the Euro growth (and if the Euro zone grew faster than predicted). Plus, even if the investor does realize which way the market should move based on the information, they still need to enter and exit the position before the information can be assimilated into the pricing.

    Forex scalping is a very dangerous investment strategy because the market is so very volatile and positions are leveraged to the hilt. In short order, scalping can cost an investor all of their capital--and perhaps even leave their account in the red. Although a viable option, traders new to the Forex are encouraged to find another, safer strategy to use.

  2. #2
    Piplet
    Join Date
    Aug 2007
    Posts
    11
    FXO Shares
    0
    FXO Bonus
    0.000
    Thanks
    0
    Thanked 0 Times in 0 Posts

    Default

    I have a basic (may be stupid) question: is the scalping absolutely allowed and legal method?

    Earlier I used the *********, and I read that they don't like scalping very much. I heard of some restrictions: for example if you close your trades in 5 minutes, you can do it max. 10 times within 4 hours. And you are not allowed to do more than 200 trades in a week.

    So what is the truth about scalping?

  3. #3
    Director of FXOpen Aus FXOjafar's Avatar
    Join Date
    Apr 2007
    Location
    Sydney
    Posts
    3,482
    FXO Shares
    50
    FXO Bonus
    1.463
    Thanks
    2
    Thanked 80 Times in 52 Posts

    Default

    Quote Originally Posted by ViragElvtars View Post
    I have a basic (may be stupid) question: is the scalping absolutely allowed and legal method?

    Earlier I used the *********, and I read that they don't like scalping very much. I heard of some restrictions: for example if you close your trades in 5 minutes, you can do it max. 10 times within 4 hours. And you are not allowed to do more than 200 trades in a week.

    So what is the truth about scalping?
    Yes, scalping is allowed here. This is a broker, not a bucketshop, so if you are willing to make 20 or 30 trades to make 100 pips, when 2 or 3 trades would do, FXOpen is happy to earn the spread.
    Jafar Calley - Director
    FXOpen AU Pty Ltd
    Level 26 • 1 Bligh Street
    Sydney NSW 2000
    Australia
    AFSL:412871 ABN:61 143 678 719
    http://www.fxopenaus.com

  4. #4
    Piplet
    Join Date
    Aug 2007
    Posts
    11
    FXO Shares
    0
    FXO Bonus
    0.000
    Thanks
    0
    Thanked 0 Times in 0 Posts

    Default

    OK, thanks.
    I promise to earn the 100 pips with 1 trade

    But it is good if there are not restrictions.

  5. #5
    Bullish
    Join Date
    Aug 2007
    Posts
    82
    FXO Shares
    0
    FXO Bonus
    0.000
    Thanks
    0
    Thanked 0 Times in 0 Posts

    Default

    Quote Originally Posted by RebateFX.com View Post
    Yes, scalping is allowed here. This is a broker, not a bucketshop, so if you are willing to make 20 or 30 trades to make 100 pips, when 2 or 3 trades would do, FXOpen is happy to earn the spread.
    That's Great.... It's my style.

  6. #6
    Bullish
    Join Date
    Sep 2007
    Posts
    95
    FXO Shares
    0
    FXO Bonus
    0.000
    Thanks
    0
    Thanked 0 Times in 0 Posts

    Default

    one day a friend of mine told me how he trade the news, he open 5M chart, he entr the trade at open price of 3ed 5M candle, coz first one is the empact of the news, the second is the retracment.

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •  
Disclaimer
2005-2016 © FXOpen All rights reserved. Various trademarks held by their respective owners.

Risk Warning:: Trading on the Forex market involves substantial risks, including complete possible loss of funds and other losses and is not suitable for all members. Clients should make an independent judgment as to whether trading is appropriate for them in the light of their financial condition, investment experience, risk tolerance and other factors.

FXOpen Markets Limited, a company duly registered in Nevis under the company No. C 42235. FXOpen is a member of The Financial Commission.

FXOpen AU Pty Ltd., a company authorised and regulated by the Australian Securities & Investments Commission (ASIC). AFSL 412871ABN 61 143 678 719.

FXOpen Ltd. a company registered in England and Wales under company number 07273392 and is authorised and regulated by the Financial Conduct Authority (previously, the Financial Services Authority) under FCA firm reference number 579202.

FXOpen does not provide services for United States residents.

Join us