Scalping is a popular forex trading strategy that involves entering and exiting the market many times within the same day. These scalping trading hints can help you make consistent profits and improve your trading performance.
Have a simple trading strategy
Scalping requires quick decision-making under pressure. Using a single indicator like a moving average will make it much easier to make profitable trades. A complicated scalping strategy can be hard to use and lead to mistakes.
Trade only one or two markets
Scalping takes a lot of concentration, so it is best to focus on one or two markets only. Trading the same market will help you understand how that market moves and enables you to build a profitable trading strategy.
Exit losing trades quickly
A reason traders lose when forex scalping, is not exiting their losses. Scalping is about many small profits, so one losing trade can cause big problems. Place a stop every time you trade and if within 15 minutes your target is not achieved, consider exiting the trading position.
Trade at the same time
Market conditions and volatility change throughout the trading day. A strategy that works in the morning might not work in the afternoon. Becoming an expert in trading the same 1 to 2-hour period will help you remember market patterns and avoid over-trading.
Achieve a risk reward of over 1
Achieving an average profit higher than the average loss (risk/reward over 1) means you only need a win rate of 50% to be profitable. Too many traders using a scalping strategy forget about risk/reward and focus on making many small profits only. There will be opportunities for you can extend your profits to increase your average profit when volatility is high.