Perfect Scalping Strategy for the Rookie Traders
Tuesday, July 23, 2019, 6:00 AM | Leave Comment
There are many ways of trading the Forex market. The elite class traders always suggest new traders trade the market in the longer time frame.
Longer time frame trading is extremely boring and some rookie traders prefer to trade the lower time frame.
Lower time frame trading is often known as scalping and it is one of the riskiest trading strategies in today’s world.
However, if you can truly master the art of scalping, it won’t take much time to make a fortune out of trading.
To do so, you must create a perfect scalping strategy.
Now we are going to give you a clear guideline to create your scalping strategy from scratch. Let’s dive deep.
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Use the demo account
The first thing which you need to do is to find a professional broker like Saxo who offers a free demo account. Once you have access to the premium trading environment, try to understand how this market works.
See the price movement of the different financial instrument and within a short period of time, you will realize this market is extremely volatile. Try to find the key support and resistance level in the higher time frame since it will give you the sweet spot for trading.
You might be thinking we are going to teach you long term trading strategy but in reality, analyzing the higher time frame is just a part of your scalping system.
Once you have successfully identified the key support and resistance level in your trading platform, switch the lower time frame. Try to find a high-quality price action confirmation signal near the key levels of the market.
Let’s say you have spotted a bullish reversal signal in the 5 minute time frame. So, if the price trades near the critical level in the daily chart, you can easily execute the long trade and make a decent profit from this market.
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Dealing with the losing trades
Scalping the market based on multiple time frame analysis and price action trading signals is extremely profitable. But that doesn’t give you the assurance of winning all the trades.
Traders with a decade of experience often have to face a few losing trades in a row. Due to their strong risk management skills, they are able to recover the loss without any hassle.
As a new trader, you need to prepare yourself to lose some trades on a regular basis. This might sound a little weird but if you trade with high-risk reward ratio, you will never have to worry about the losing trades.
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Scaling your lot
We all know scalping is associated with big position size trades. As a new trader, you have to scale the lot size for each trade with an extreme level of caution.
Regardless of the quality trade setups, you should never risk more than 2% of your account balance. If you lose any trade, never become frustrated or try to recover the loss. Consider the losing trades as your business cost and wait for the next potential trade setups.
Make sure you are not taking too much risk by using big lots. Try to follow the conservative trading technique since it will protect your trading capital.
Scalping can be extremely profitable given that you know the details of the market. As a scalper, you should always keep yourself updated with the latest market news. Never execute any trade prior to high impact news release since it might cost you heavily.
During the event of high impact news, the market becomes extremely volatile and thus you might experience heavy slippage. Being a scalper you must have complete control over your emotions.
Forget about the high-risk trading strategy and try to trade the market with simple logic. Take all the time you need but learn to scalp the market in a demo account.
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