ForexGen | What ist Forex Scalping?

The forex market is the most liquid of today’s exchange, trading in excess of 1.6 trillion dollars daily. This is roughly greater than 5 times the daily trading volume of the U.S. Treasury Bond Market, and 160 times the average daily volume of the U.S. Stock Market. This extreme liquidity gives forex traders an edge in the art of lightning fast execution and the quick trade method referred to as “scalping”.

Forex scalping is the art of using high leverage and a large number of short term trades to steadily increase an account. Usually, only 1 to 5 pips are targeted for each trade. This type of trading appeals greatly to day traders and those looking to minimize the risk involved in trading currencies. Next to money management, “risk control” is the single most important trait to a surviving (and thriving) currency trader. The small amount of time that is spent in the market limits much of the risk in exposure in comparison to a longer term system. Also, the freedom involved in a speedy forex scalping system in such a liquid market is a “magnet” that drives many traders from other markets to try their hand in currency. A disciplined and steady scalper could seamlessly double or triple an account, and spend only a fraction of the time in the market as a common day trader.

Though forex scalping may seem like a preverbal “holy grail” at first glance, there are still many unseen hurdles that surround the controversial method of trading. If you do wish to add scalping to your trading toolbox, it is extremely important to pick a broker who can support a scalpers’ system. You will quickly find that many brokers do not allow scalp trading, as the method of quickly entering and exiting trades may actually cause the broker to lose money at the dealing desk. Forex scalping also does not give the broker a means to trade against their clients. Out of the hundreds of online forex brokers, only a handful support (and sometimes encourage) scalping.

Effective forex scalping strategies take advantage of extremely slight price fluctuations (sometimes only 1-3 pips) many times in order to steadily build an account. Because of the smaller number of pips gained per trade, larger than normal leverages play a key role in a successful forex scalping strategy. By leveraging much more than a standard day trader in a liquid environment, a very skilled scalp trader is able to make just as much money as the day trader in a shorter period of time. However, this is an obvious double-edged sword. The market can just as easily move against you on a high leverage, which could produce substantial blows to your account.

Also, it is important to take into consideration the physical and mental speed of a trader who will only stay in the market for seconds to minutes. Executing a scalping strategy by hand can be extremely difficult considering the quick amount of time you must be in and out of the market for your strategy to be affective Many successful forex scalping strategies are built to be automated; the rules to the system are coded into a trading platform to automatically perform scalp trades around the clock. Though it is completely possible to trade a forex scalping strategy manually, the majority of today’s traders would agree that automating the process based on a set of rules would be the best way to ensure speed and reliability. When choosing a platform to automate your scalp strategy, it is extremely important to stick with those platforms that allow the execution of your system on every tick (such as MetaTrader 4). This ensures that your entrances and exits will be on a per-tick basis, and will give you a much higher probable rate of success than those platforms who will execute your code more periodically.

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ForexGen presents specialized Forex online trading services. We support trading in variable currency pairs, available services 24 hours a day most of the week. Real time prices are supplied to facilitate the trading and make it more quick and efficient. Our trading terms & conditions are the most competitive trading terms & conditions for various trading kinds which represent our appreciation to every client starting from the smallest customers. ForexGen is re-setting professional trading technology, by a continuously tracing the competence offers and modifying our trading conditions and provided platforms.

Beware of Curve Fitting or Lose!

Forex scalping systems are more popular than ever and they all come with great track records, which have unbelievable gains and their very tempting for novice traders but what they need to be aware of is - curve fitting which ensures that most scalping systems lose money.

Curve fitting is when a vendor bends his system to fit the data.

When the vendor can't get the system to work, he keeps adding more rules and parameters in until it does, by bending the system to fit the data or curve fitting. He then has a track record he is satisfied with or more to the point gives him a great track record he can sell.

What happens next?

No two periods of data are going to exactly replicate themselves and the system simply collapses and loses in real time trading.

LOOK FOR THIS DISCLAIMER!

The buyer scratches his head and wonders why - but if he looked for this on the track record he can find out if its curve fitted. Look for the disclaimer below (or similar) on any system you buy - this is standard CFTC one.

"CFTC RULE 4.41 - Hypothetical or simulated performance results have certain limitations. Unlike an actual performance record, simulated results do not represent actual trading. Also, since the trades have not been executed, the results may have under-or-over compensated for the impact, if any, of certain market factors, such as lack of liquidity. Simulated trading programs in general are also subject to the fact that they are designed with the benefit of hindsight. No representation is being made that any account will or is likely to achieve profit or losses similar to those shown".

If you are looking at buying a forex scalping system from a vendor, beware there all curve fitted.

You will NEVER find one with a real time track record, as forex scalping simply doesn't work by the very nature of the logic its based upon.

The time period is simply to short.

All volatility in daily or hourly time frames is random - support and resistance is meaningless and prices can and do go anywhere in a day. It's impossible to get the odds in your favor and forex day traders always lose long term.

Of course it makes a good story and naïve and greedy traders buy it and vendors know this.

They simply tell the story add a simulated track record and appeal to their greed - it's a big industry.

If you want to trade forget forex, forget scalping systems or day trading and trade longer time periods, where you can get the odds in your favor.

Leave forex scalping systems to the dreamers and greedy traders, get the right forex education and enjoy currency trading success by using longer time frames and valid data.
Why ForexGen?
1. Lowest spreads in the market with 0-1 pips in 10 pairs, no commissions, no swaps and instant account Activation.
2. Scandinavian quality with Swiss precision, funds secured and local agents in 18+ countries.
3. ForexGen offers Forex trading in the major currency pairs and crosses.
4. Low capital start, with $250 as a minimum account size.
5. Liquidity and 24/5 availability are the characteristic factors of the Forex market compared with other financial markets.
6. ForexGen offers a free trial Forex demo account that allows you to test your skills and practice without risking real money.

Forex Scalping Systems - Why you Will Lose All your Money Quickly

Wherever you look on the net you will say adverts for forex scalping and day trading systems
which promise regular profits that can make you rich but there is a problem, none of them work, because forex scalping is based on logic that simply is not correct...

The problem of course is prices are determined by humans and I such short time spans as a day you have no way of knowing which way prices are going to go.

Millions of traders all using different methods and governed by the emotions of greed and fear cannot be predicted in such short time spans. This means that daily volatility is random, prices can and do go anywhere in a day and support and resistance is meaningless.

You will always see track records that make huge profits presented but they are all done knowing the closing prices! Let's face it if a track record looks to good to be true it normally is and this applies to forex scalping and day trading systems.

You can simply look for a disclaimer and you will normally find this one or similar on any track record.

"CFTC RULE 4.41 - HYPOTHETICAL OR SIMULATED PERFORMANCE RESULTS HAVE CERTAIN LIMITATIONS. UNLIKE AN ACTUAL PERFORMANCE RECORD, SIMULATED RESULTS DO NOT REPRESENT ACTUAL TRADING. ALSO, SINCE THE TRADES HAVE NOT BEEN EXECUTED, THE RESULTS MAY HAVE UNDER-OR-OVER COMPENSATED FOR THE IMPACT, IF ANY, OF CERTAIN MARKET FACTORS, SUCH AS LACK OF LIQUIDITY. SIMULATED TRADING PROGRAMS IN GENERAL ARE ALSO SUBJECT TO THE FACT THAT THEY ARE DESIGNED WITH THE BENEFIT OF HINDSIGHT. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFIT OR LOSSES SIMILAR TO THOSE SHOWN".

Of course if we all knew today's prices in advance, we would all be rich but we don't.

Forex trading is harder - you have to trade going forward not backwards.

Vendors who sell these systems simply use hyped copy and a simulated track record to appeal to naïve or greedy traders - they know the system doesn't work, so they don't bother trading it - they simply make up a track record.

Despite the hype, forex scalping doesn't work and you need to trade the odds to win and that simply is not possible in short time frames.

There are two ways to make money in forex trading, you can either swing trade which takes advantage of trends that last for a few days to a few weeks, or long term trend follow which takes advantage of moves that last for weeks or months.

If you want to enjoy currency trading success, you need to trade the odds - to do this you must have valid data and data within a day or less is not valid.

Forex trading is not easy and you wouldn't expect it to be with the rewards on offer but if you learn forex trading the right way and spend some time on your forex education, you can make big profits and for the effort you put in no other business offers you more in terms of rewards.

So forget forex scalping systems and look to trade the odds, using valid data and this will lead you to currency trading success.

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How to Limit Risk and Make Huge Profits

Forex scalpers aim to make small regular profits and in time build this up to a large income. Forex scalping is very popular and here we are going to look at how not to lose your money at it.

The best way not to lose money is not to even try it - it doesn't work, before we explain why you may wonder why you see so many courses and people claiming big gains so here is the answer - the gains are paper gains and not real money. Read the disclaimer below which you will always see or a similar one with any forex scalping system:

"CFTC RULE 4.41 - Hypothetical or simulated performance results have certain limitations. Unlike an actual performance record, simulated results do not represent actual trading. Also, since the trades have not been executed, the results may have under-or-over compensated for the impact, if any, of certain market factors, such as lack of liquidity. Simulated trading programs in general are also subject to the fact that they are designed with the benefit of hindsight. No representation is being made that any account will or is likely to achieve profit or losses similar to those shown".

As you can see if a trading system carries the above it's of no real use in terms of indicating profitability. We can all make money knowing closing prices and past data - it's easy. In the real hard world of forex trading, you don't have this luxury.

So why is forex scalping doomed to failure? The answer lies in the data is not reliable and you cannot (no matter how clever your trading system is) get the odds on your side.

In currencies prices in a few hours can and do go any where volatility is random and support and resistance levels within a day simply cannot be used to get the odds on your side.

As all volatility is random you are destined to lose long term. If you think about this it's obvious:

Huge numbers of traders make the final price and they all have different motivations, skills and levels of emotion that input into their trading and to say this huge mass can be predicted in short time frames is ridiculous.

Not only do you have the above to contend with but forex scalping breaks a fundamental rule of trading:

Run your profits to cover your inevitable losses.
All trading systems have losses and drawdown periods and you need to run your profits to cover them. Now scalpers do get profits (everyone is lucky some time) but what do they do - Do they run it? Not a chance they bank it!

Of course luck doesn't last for ever and if you are trading with the odds against you your on borrowed time and will lose eventually it's just a question of when.
So if you want to keep your equity intact don't forex scalp - trade longer term and get the odds on your side. Sure, short term trading sounds great but the odds don't stack up it's a wonder that sane intelligent people in other walks of life think they can win with a made up track record and a system costing a few hundred bucks.

You can make a lot of money trading but forex scalping is doomed to failure - trade longer term, get the odds on your side and win.
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