28th October 2015
Scalping, or short-term trading on the currency market, presents a list of pros and cons. In the end, any good trading strategy will undoubtedly shed light on the inherent risks of this shortest of trading options in Forex.
*Disclaimer: One Financial Markets does not support or recommend this trading method. The article below is to raise awareness of the pros and cons that scalping strategy holds.Ask any seasoned Forex trader and they’ll certainly have an opinion on scalping. Scalping is simply making lightning-quick trades on the currency market and hoping for the best. While some consider this the ultimate in strategies, the majority of traders understand that a more balanced approach is often safer and more lucrative in the long run. Let us first take a look at some of the generally accepted pros of scalping the market:
While the benefits and risks of scalping are certainly worth discussing, it is also critical to dive into the pros and cons of the other types of currency trades: intraday trades and swing trades.
Intraday trading refers to holding a currency position for a period lasting from a few hours to a day. This is a common practice among Forex traders and can deliver consistent profits and less volatility than scalping. Many Forex traders conduct more than one trade in a day, and intraday trading has proven to be quite effective when combined with other currency trading strategies. The following are some of the pros and cons of this option:
Successful traders must ask themselves – what is the style that best matches my abilities, personality, and risk tolerance? Furthemore, what approach has historically delivered the best gains? In short, intraday trading and swing trading have proven to be the most effective ways to reap real profits on the currency market. Most reputable brokerage firms will support those involved in this type of trading, and work to migrate scalpers into this more profitable and secure facet of investing.
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