October 21, 2013

The Use of Fundamental Scalping Forex Trading

This article looks at the forex trading that you can do with the scalping strategy.

Fundamental Scalping in Forex Trading

There are a lot of traders who look at using scaling on the forex market.  If you are one of these traders then you need to consider the different ways that scalping can be done.  It is possible to scalp the market technically and fundamentally.  If you are serious about the use of scalping for your forex trading then you need to know about both of the methods.  You will also need to know about the benefits and drawbacks of the different methods of scalping.

What is Scalping?

Before you can look at the different ways that you can scalp the market you have to know what scalping is.  Scalping is a forex trading strategy that works on the short-term.  There are many traders who would classify scalping as an extreme short-term trading strategy because the trades that you open will only be held for a few minutes.

To make a profit with scalping you are going to be looking for a small movement in the market.  The movement in the market could be anywhere from 5 pips to 20 pips.  It is rare for a scalper to make more than 20 pips on a single trade.  The profits that you make will be small, but the number of trades that you can complete is generally quite high.  This means that the profits will add up and you could use scalping as a viable full time forex trading strategy.

Forex Trading Fundamentally

There are many traders who think that fundamental trading is all long-term trading.  This is incorrect and it is possible to scalp fundamentally.  When you scalp fundamentally you are going to be looking at all news releases that affect the market.  As the movements you need on the market are not that large you will be able to find them after the release of high and low impact news.

Of course, it is not that easy to scalp fundamentally.  If it was as easy as trading after the new release then more forex traders would be using the strategy and making a profit.  To scalp fundamentally you have to consider the market sentiment related to the news you are trading on.  If the results of the news are what the market has been expecting then there may be no movement to trade on.

Scalping Technically

Technical scalping is the method that a lot of traders will use.  The technical movement on the market are easier to track and you can easily find when you should be trading.  When you scalp with technical analysis you will be able to use technical indicators and price action patterns.  The small movements in the market will be easier to pick up with the use of price patterns as you can find continuation and reversal patterns that will help you.

If you are going to be trading with the scalping strategy you need to know what you should be doing.  There are two ways that you can scalp and they are technically and fundamentally.  It is important that you find out as much as you can about the different methods before you trade.



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