Forex Scalping Myths: You've Been Warned

Forex scalping is often pushed and promoted on the internet as the way to make big dollars from trading

. However, there are serious problems with this type of strategy that you must understand before you risk your hard earned money. To understand forex scalping better, you must first realize why it is heavily promoted.

Scalping is promoted both by brokers and product sellers. Brokers like to push scalping because it leads to over trading. This, more often than not, is disastrous for new traders. So why do brokers promote such a destructive strategy? Well, forex is a unique market where the majority of brokers are actually market makers who trade against their client's positions. So for many brokers, the quicker they drive you to financial ruin the better.

Product sellers, like those to sell the latest books or forex software, also love the idea of scalping. The reason is that scalping is an easily marketable idea. It plays to people's needs. People love the idea of sitting in their office chair in their underwear, drinking coffee, pecking away at the keys on the keyboard, and making a few thousand dollars a day entering short term trades. It really is a dream that we would all love to live. But it is a dream nonetheless.

Scalping has been described by some as picking up pennies in front a moving train. It really is kind of like that. Traders employing this strategy often take huge risks for little reward. On top of that, you have the spread to contend with, which varies from broker to broker and can be from one to three pips. I'd recommend that new traders look at other strategies before making a decision as to how to proceed with their trading.

Forex Scalping Myths: You've Been Warned

By: Alex Post

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