Business and Finance

Do You Understand Scalping In Forex?

A person who does scalping is usually a trader who uses technical analysis, not a fundamental trader. Technical analysis focuses on the movement of a currency pair in the past, which usually uses the help of charts and other data analysis tools. Traders use historical price information to predict future price movements of an asset and prepare for future transactions. While fundamental analysis usually involves the use of a company’s financial statements, discounted cash flow modeling, economic indicators, and other tools to assess a company’s intrinsic value. Scalpers can trade based on news or agendas that can drastically affect the company value or the price of a currency pair quickly after being released in the forex factory economic calendar. In some cases, scalpers can also use short-term fundamental ratio changes for scalping, but usually, most scalpers focus on technical charts. Additionally, scalping works great with high leverage too. Therefore, you may want to visit http://www.cnie.org/highleverage/forex-scalping-high-leverage.html to find high leverage brokers that allow scalping method.

Scalpers use technical analysis, but in this style, they can be either a discretionary trader or a system trader. A discretionary scalper will make every trading decision in real-time (even though it is very fast), while the scalper system follows scalping techniques without making trading decisions on their own. Scalpers primarily use market prices to make their trading decisions, but some scalpers also use one or more of the best indicators for scalpings, such as moving averages, channel bands, and other chart patterns.

The scalper will choose between watching the monitor all day long to wait for trading signals from the m15 scalping indicator or the scalper can also use a Forex EA or a profitable Forex Robot and which will automatically trade based on predetermined criteria. The chart time frame used for scalping and the length of time each open forex transaction takes is the shortest among other trading styles. For example, a day trader might use a five-minute chart, and make four or five transactions per trading day, with each transaction open for thirty minutes.

Conversely, a scalper might use a one-minute chart, where each price bar represents only five trading seconds, and trade between 20 and 100 or more per day, with each trade open for a few seconds to several minutes.

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