Forex Scalping As A Viable Technique For Additional Profits
Forex Scalping As A Viable Technique For Additional Profits
I'm often asked about the viability of using forex scalping techniques as either a part of your overall approach to trading, or as a stand-alone way to reliably generate short term profits.
In my personal experience, scalping can be a great supplement to a longer term strategy. So for example, if you're a swing trader longer term, or more of a forex position trader, these short term trades are a great way to add pips to your account while waiting for longer term set upsIF you know what you're doing. Scalping can even be the sole way to make consistent profits.
Now, I just want to clarify what I mean by scalping, because different people have different definitions. Scalping is a trading technique for capturing very short term trading opportunities. Typically the profits are small in terms of pips gained (for me, anywhere from 10 pips on up), however that's certainly not to say that trades that start out as small scalping opportunities can't turn into much bigger profits.
You should find quite high accuracy with very short term trading, but the one thing you do NOT want to do is compromise sound risk management just to get higher accuracy and small pip gains. Always remember that we NEVER know what's going to happen next. And always, always plan on how you'll handle a situation that goes south. You'll need to be nimble with scalping strategies.
As for the way (style) that you scalp, it's going to depend a lot on your own time availability for trading. For example we have a particular short term trading set up that we trade with an incredibly high success rate (currently over 90% over the past 11 months), and this trade happens around the London Close, so obviously you're going to need to be available for that time period if you want to trade that set up. (As a side note, the actual set up can be applied to different times as well).
One of the really nice things about short term trading is that you get fast feedback. Mark Douglas, in his excellent book, Trading In the Zone, talks about the need to take at least 20 consecutive trades using the very same approach, over and over, before deciding on whether or not it's any good, or just as importantly, whether or not YOU can even do it. Because no matter how good a method may be, if you can't pull it off, then it's pretty much useless.
So with short term trading, having the measurable results that 20 trades gives you, assuming you have a profitable methodology, psychologically instills confidence very quickly, compared to a longer term approach. And confidence is a personality trait that is absolutely vital in anything that you want to do well at.
If you are looking for a way to add pips to your trading campaign, you might want to consider finding a good, short term trading technique. It may not be for everyone, however if you learn what to look for, you can really enhance the returns in your account!
All the best,
Vic Noble
**To learn more about forex trading and how I teach, I have a FREE e-Book, plus 7 great videos on key trading concepts that I believe will genuinely help you. No obligation, just good useful information! http://www.forextradingandeducation.com/wp/free-fx-training/
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