Forex trading has become a very popular mode of investment these days, surging ahead of stock markets in terms of total turnover. It provides a chance to an individual to book profits whenever there is a movement in the price of currency pairs. This is similar to investing in the economy of a country as the price of currency is often dictated by the shape and health of a country. There are many different strategies in earning a profit from currency markets and Scalping is just one of them. This is a technique of placing a bet and exiting from the trade as soon as it turns profitable without waiting in the hope of higher profits.
The Reason and Aim of Scalping
A scalper or the trader who follows the scalping technique will stay in a trade for only a few minutes or seconds as he/she has to book his/her profit and get out of the trade at the first instant the trade turns advantageous. The major aim of scalping is to allow a trader to make a few pips with every trade, giving him ample time to conduct many such trades in a day. Traders interested in scalping are called futures players. This means they are there to make small profits with little movements of currencies unlike traders that stay in a trade for long duration in the hopes of higher earnings.
Small Profits That Add Up Become a Decent Sum by the End of the Day
The major premise behind scalping is the belief that the first stage of movement in the price of a currency will take place but it is difficult to predict the movement of the currency after a brief period of time. It is this belief that makes a scalper to exit as soon as he/she earns a profit of a few pips rather than staying in the trade for a longer time. Scalping is a good technique for investors who are interested in intra-day trading and do not have the patience or strategy to stay long in a trade. Your Forex Scalping strategy can either be manual or an automated strategy. Scalping is thus a guaranteed way to earn money by Forex trading as compared to other trading techniques.