Foreign Exchange (Forex/FX) is the largest currency trading (buying one currency and selling another at the same time) market, operating 24/7. A Forex Scalper System works in the way that traders (scalpers) buy into a market long enough to make the first profit and quickly move on to the next – high leverage, short term trading.
There are many things you need to know if considering the Forex Scalper System – one being, choosing the right Forex broker. Let’s look at this in terms of a ‘school exam’ and the Forex Scalper System is the answers (a cheat if you will) – your teacher doesn’t want you to cheat so will prevent you from doing the test, as will particular Forex brokers.
Number two is the initial basics – knowing what’s what. Where a ‘bid’ is the price you buy your currency for, ‘ask’ is how much you can sell it for. ‘Spread’ is your enemy (the difference between the bid and ask price) the name of this game is to sell quick enough that you don’t lose money but hold out long enough to make a reasonable profit (like baseball – swing too early or too late and you’ll miss it!) The unsaid rule so to speak is to hold on no longer than an average of six minutes (attentiveness is key).
Once you have the basic lingo down it’s on to ‘observing’. Your main objective is to find a form of ‘common denominator’, a ‘pattern’, something that gives you the wild card. The patterns can be features such as what currencies are usually traded together? (Like EUR/USD) or what are the peak times for trading between these currencies? (Like 8am-12pm EST (1pm-5pm GMT). You could even create your own graphs showing averages and trend lines for a few weeks before diving in.
Step four is to find which Forex Scalper System strategy is best for you. There are hundreds, from the basic to the more advanced, if new to the scene begin in the basics and work your way up slowly till you find a strategy that best suits you and your lifestyle. One example of a basic Scalper System could be – if the time frame is 1 hour, indicators are: 5 SMA, 10 SMA and 20 SMA; entry rule is: when 5 SMA goes through 10 and continues through 20, buy or sell in the direction of 5 once past 20; exit: either when 5 revisits 10 or hold out longer for it to pass 20 again.
After getting comfortable with your scalper strategy you must build your safety net. Your safety net will include knowing your stop losses and having a back-up plan. A back-up plan is not a way to get out of a bad trade but more so making sure you are able to exit when you plan to; i.e. fast internet connection, a back-up for internet failure, a phone nearby with the number ready to call direct to the broker and so on. Following your studying of the Forex Scalper System you are ready to trade!
Risk warning: Spreadbetting, CFD trading and Forex are leveraged. This means they can result in losses exceeding your original deposit. Ensure you understand the risks, seek independent financial advice if necessary. The value of shares and the income from them may go down as well as up. Nothing on this website constitutes a solicitation or recommendation to enter into any security or investment.