Forex Scalping Systems

Forex Scalping is one trading technique that is popular with many forex traders. Forex Scalping  is different from swing trading and this difference is based largely on how long it takes to enter and exit a trade.

With Forex Scalping, traders enter and exit trade within minutes…even seconds.

But this is not the case with swing trading…where trades are entered and can last up to many hours, days and even weeks.

I personally do not like to scalp the forex market but having said that, once in a while on rare occasions, I will take trades and exit within minutes.

WHAT KIND OF FOREX SCALPING SYSTEMS SHOULD YOU USE?

Forex scalping systems are no different from any other forex trading systems you may find.

As a matter of fact these forex trading strategies here can be used as forex scalping systems.

The only change that needs to happen is that instead of trading in the larger trading timeframes , you should be trading in the 1 minute and 5minute timeframes.

WILL THE TRADING RULES CHANGE FOR FOREX SCALPING SYSTEMS?

Not really. The trading rules if you were to use the forex trading strategies here remain the same, its only the timeframe you trade that needs to change…

Having said that, there may be some little variations though in terms of taking profits and stop loss placements.

Because the forex trader is entering and exiting trades within a few minutes, you may need to adjust or modify your exit strategies to match the shortness of time your trade runs.

What do I mean by that?

Well, when you are a forex scalping trader, you can be looking to trade anywhere from 5-30 trades a day or even more.

You are not interested about about making 100 pips profit a trade. Such a trade would generally take hours (unless in a forex news trading) and you are not interested a trade that goes for hours.

What you are looking for is anywhere from 10-20 pips profit each trade. In and out, in and out.

Many little gains over time to increase your forex trading account. That is the nature of forex scalping.

FOREX SCALPING SYSTEMS

The following forex trading strategies can be easily adapted to forex scalping systems:

1. Forex Scalping System-The Trendline Trading Strategy. Full Trading Rules of the Trendline Trading Strategy Can Be found here.

2.   Forex Scalping System-The Floor Traders Method.

In a very good trending market, the floor trader’s forex system is a good forex scalping system which you can use in the 1minute and 5minute charts.

3. Forex Scalping System-34 EMA with Trendline Break Strategy

The 34 EMA with The Trendline Break Forex Trading Strategy can be used as a forex scalping system in the 1minute and 5 minute timeframes.

I’ve just only highlighted a few good forex trading strategies which you can use as forex scalping systems. Click this link to check out other forex trading strategies which you can use as forex scalping systems.

THE ADVANTAGES OF FOREX SCALPING

• some forex traders, due to their personality like excitement and adrenalin pumping trading environment like what forex scalping offers.
• because you have less time for a single trade in the market, the less exposure and risk you have of fundamental changes that tends to move the forex market which tends to happen in trades that last longer.
• practice good trading risk management with a steely focus you can be a very successful forex scalper.

DISADVANTAGES OF FOREX SCALPING

• you cost of trading is larger. If EURUSD spread is 2pips for 1 standard contract, and you average 20 trades a day, then your daily cost is 20trade x 2pips=40pips=$400.  If you Trade 20days a month and that gives $400x20days=$8,000. That’s a freaking lot of money you are giving away. Compared to a swing trader who may make 5 trades a week=5x2pip spread=10pips=$100 per week. Now if that swing trader trades for 20 days in the month=20daysx$100=$2,000 per month.
• no proper risk management and you are pretty much doomed! Here’s why: you are trading for very small profits or many number of trades to make your money. So you cannot afford to have large loses in a single trade. This will wipe out all the gains you could have made last week etc…
• you need to be really focused with the ability not to vary from your trading rules. If you lack this, you will not make a good forex scalper.
• its a stressful trading environment for many forex traders…(which means you may have relationship problems 🙂 )