How To Test A Forex Scalping Robot?

Scalping is a trading strategy that can be used in almost all market whether you trade stocks

, forex or futures. Scalping is indeed a highly popular strategy among the traders as it does not depend on the trend in the market. You don't need to do much market analysis or use any indicator.

Scalping is especially popular among the currency traders. As a forex scalper, your aim is always to look for a few pips like 3-12 per trade. Now, each trade has a cost in the shape of a spread that you have to pay when you make an entry or exit. As most of the times, the spreads offered by the brokers is usually not more than 3 pips, you as a scalper need to make at least 3 pips per trade in order to breakeven.

When you do scalping, you have to ignore risk and money management rules. Most of the time, scalpers' trade without a stop loss or have a wide stop loss that can be as wide as 30-70 pips. Their aim is simply to get in and get out as quickly as possible making a few pips.

Ignoring sound risk and money management rules is not a good thing. Suppose, your aim is to make a quick 5 pips. You enter the market with a stop loss of 20 pips. In this case, if you make a losing trade and your stop loss is tripped, you lose 20 pips. Now, you need to make 4 winning trades in a row to recover your loss. Are you gambling or trading? This is not trading. This is more close to gambling.

I mean for making 3-12 pips, you are ready to lose almost 50-100 pips. So scalping demands a lot of experience! Is there a way to do scalping safely? There is one easy method that you can use to do scalping.

Use your intraday trading system. Suppose, you have a take profit target of 100 pips and your initial stop loss is at 40 pips. Just add a trailing stop of let's say like 10 pips to that. This way, if the market retraces yourself, you have your profit locked in. And if it doesn't retrace itself, you might as well get your original take profit target of 100 pips.

Now most of the scalper robots or what you call scalper expert advisors uses a huge stop loss to get the best results ever. So if you are planning to use a scalper robot, you should a smaller stop loss and back and forward test that robot to see if it works. If it doesn't don't trade with it as trading with a huge stop loss can be too much risky for you!

by: Ahmad Hassam

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