Forex investors and traders are more and more getting interested on Forex scalping. True forex scalping involves opening as well as closing of a position within few seconds or minutes at the most.Scalping employs leverage and as higher leverage means higher risk, it is substantially decreased by the short duration for which the position is open in the market. So, if forex scalping is supported by proper strategies, it provides additional risk control features that are not present in any other trading methods including day trading.
But brokerage firms do not encourage forex scalpers, and they have valid reason for doing so. Many brokers make money by trading against clients through dealing desks. The reason is, as the broker needs time to use the dealing desk, they cannot use it in case of a trader having scalping which takes less than a minute and the broker does not have time to deal the money.
Although regular traders are not much affected by it when they stay in the trade for hours or even days, scalpers are different and not liked by the brokers at all. Scalpers as a result use automated trading platforms for making their trades.
MetaTrader 4 or MT4 is a platform that is used by the scalpers to a great extent. Using the platform without any restriction needs ECN-type feed. Many experienced traders customize forex robots according to their strategies and needs, which work partially automated and partially manual functions.
Forex Scalping involves taking profits on extremely small price changes, just after the trade has been entered and becomes profitable. As per this strategy, the trader looks for nothing more than a quick 5-15 pips profit. If you can maintain a strict exit strategy scalping is rather safe than other forex trading strategies.
The demarcation between scalping and short-term trading is thin and at times subjective. If you trade for less than a minute the broker would consider that to be scalping and may warn you. But if it is more than few minutes, it can be described as short-term trade. A scalper needs a broker having non-dealing desk. The minimum amount to open such an account may be higher, which is usually $2,000 and above.
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