Advantages and disadvantages of scalping

Scalping - a way to trade in the Forex market, which is used on short timeframes. The duration of the transaction is small. On average, the trader closes the deal after 2-3 minutes. For this small amount of time you can take a few pips. The player's task - to use any price fluctuations. The main thing that they exceed the size of the spread.

Basics of scalping

1. Some brokers do not permit scalping. Carefully read the rules before the opening of the deposit. Otherwise, the resulting income may simply be canceled.

2. Marginal software depends on the amount of leverage. The higher the value, the smaller the amount needed for trading.

3. Trade efficiency can be improved by means of special indicators for scalping. They will help you make the right decision.

Advantages scalping

1. The profits of up to 50% on the day.

2. This strategy works for all financial instruments. Moreover, it has proven its effectiveness, both in lateral price movement, and in a period of rapid growth or fall of quotations.

3. For trade does not require a lot of knowledge. After all, prior to the opening position you will simply have no time to conduct a thorough analysis of technical and fundamental factors. Most scalpers trades on the M1 range.

Disadvantages scalping

1. The psychological burden on the trader is very high. Emotional overload may lead to a large number of losing trades. Therefore, emotions must be very strictly controlled. Scalping is not suitable for players who are not able to fully control his actions when trading.

2. Leverage has a significant impact on the risks. They are quite difficult to calculate with such intensity transactions.

3. Spread takes the lion's share of the profits. But brokers can increase their size without warning. Therefore, you need to carefully monitor their changes. Otherwise, the trade can lose meaning. In this case it is necessary to switch to another currency pair.

4. The market situation may change so quickly that you just do not have the time for issuing the stop-loss. Especially because many brokers do not allow its installation closer to 3-4 pips from the opening price of the transaction.