Forex trading online made its reputation as a quick hit game. Broker after broker was preaching that short term forex strategy or commonly called forex scalping, is the way to go. Many have also said that it’s an easy forex strategy that can make you rich in a matter of hours if you did it properly. Let’s take a quick look and see if there are actually benefits to trading using forex scalping.
Before I really get into this, I want to preface the discussion with the fact that I have been trading the forex market for quite some time and my personal belief is that while I you can make a profit learning to trade forex scalping, you have to decide if the risks are actually worth it.
The biggest obstacle you will have to get around is the data. You will have to make real time super fast sense of one and five minute charts. Trading Online Doing this hastily may have you thinking that nothing more than random movement is an actual trend. You make the wrong move, and you are now at your stop loss and watching your money roll away. Some forex traders overcome this by using automated forex trading system.
That presents you with a situation where you can possibly make 5,6 or 7 straight hits and then get popped with you loss and you are behind for the day. When you are online forex trading short term, you get in and you get out. You are usually happy with a small profit, but the losses happen quickly and can back you up much deeper in your forex account than you were ahead.
If you want a guarantee on forex scalping, it is that your blood pressure will go up and if you were not susceptible to stress, you will be now. You are faced with pressure from the moment the bell goes off and it stays that way the entire day. There are no breaks because you are literally looking at every minute of trading. Wouldn’t you rather look at a 4 hour trend, put your stop order in and walk away for the day?
Another factor that has to be considered is that you can make double digit hits in a single day doing forex scalping and still come up short on one good daily trend. The short term hits tend to be very small most of the time whereas when you spot a good daily trend and max it out, you can make a killing.
As far as I am concerned, you can make a profit with short term forex trading strategies, but you have to decide if the price you pay is worth it. If you are an action junkie, it is definitely in your league, but you will sleep a little better going long term.