What is Forex Scalping - Forex Scalping Definition - YouTube

in this video we'll post the question what is  Forex scalping and even give a few suggestions  

as to how you can go about building a Forex  scalping system in order to understand what  

it is you need to understand what the actual  term scalping means when you are looking to  

scalp the market you are looking for short term  trades sometimes lasting just a few moments or  

possibly even seconds so with that you aren't  worried about economic conditions or fundamental  

analysis you were worried about places that you  may or may not see momentum in the market you're  

just looking for places to pick up a few pips in  order to be an effective scalper you need to get  

in and out of the market rather quickly this is  because you are looking for a quick game taking  

advantage of this little part pockets of liquidity  in the market which do show up from time to time  

they're basically spaces of thin air once you get  good at reading charts you concern to recognize  

supporting resistance support the micro support  and micro resistance that also show up on the  

charts which is probably more important for the  scalper so why would somebody become a scalper  

well there's a multitude of reasons why they may  do it not the Lisa wish is that it's much safer  

to be in and out of the market than it is to hang  on to a trade a long term position could possibly  

even lose money overnight as you sleep if you are  hanging on or for that matter just a trade of a  

few hours they're looking to pick up little bits  and pieces of profit along the way many scalpers  

will point out the fact that they are simply  small fish and a large ocean referring to the  

larger institutions out there in that sense they  are a bit afraid of going up against these large  

and to shion's but also know that they have an  advantage in the sense that they can get in out  

rather easily they're not putting so much into  the market so it's easy to take it back out they  

are going to be much more nimble both entering and  exiting as a result the thing about scalping knows  

it takes extreme concentration and discipline  it's not something that you just do on a whim  

it takes concentration and it is something that  takes quite a bit of skill quite frankly scalping  

is not something that traders should do until  they have quite a bit of screen time in front of  

them having said that you can always use a demo  account as a great way to practice in real-life  

conditions that is probably the most important  piece of advice you will hear perhaps even more  

important though than the screen time is to have  discipline when trading if you're in a losing  

trade you need to get out sooner rather than later  this is because if you are not quick to take your  

losses they can compound rather quickly this is  because quite often scalping is done with larger  

positions so therefore I can compound against you  rather quickly speaking of which you need to trade  

with the discipline to trade in manageable sizes  remember as a scalper you're looking to trade a  

little micro movement not something that is  developing over the longer term meaning that  

the slightest little deviation in monetary flow  can cause issues for you your position and your  

account the first ingredient of a decent scalping  market is to find one that won a small spread so  

this is a euro dollar depending on your broker  most of them are about half a pip maybe three  

tenths of a pip you know this is much better than  trying to scalp something that say has a seven pip  

spread you know you can under you could see how  that might be a bit more difficult to overcome you  

start negative seven pips as soon as you open up  the position so there's a couple different little  

simple ways that traders will scalp the market  and needless to say there's an unlimited amount  

of ways to do it but sometimes simple is better so  what they don't quite often do is look for little  

brick walls and brick walls are places where  the market just can't seem to get past so for  

example here is one right here at this price 108  22 now the trader will notice this and then they  

will wait for the market to break down below it  this is a 5-minute chart so we're not looking for  

massive moves here once they break down below  these three candlesticks you can see that the  

market went as low as a pip lower bounced back  and then made a bigger move now where they take  

profit they'll look for perhaps another brick wall  like right here for example you can see that there  

was definitely a brick wall there so they got a  pip or two and then got out now obviously that's  

very tight risk to reward ratio so they may do  something like put a stop loss here and then aim  

for maybe a bigger area where the buyers came in  and really took over since they're shorting and  

then scenario there's a multitude of ways they may  look for it but there are a lot of wicks through  

this area here you can see that they eventually  got that move that's still only a 5 pip move  

it's not a huge move so keep that in mind you are  talking about little tiny movements these little  

brick walls occur all the time you could see that  there's one there and what you really like to see  

is something like this you can see that there's  two little wicks there but there's three can't or  

five candles excuse me in a row and once we broke  above it all the way over here you can see that we  

shot up several pips well think about it if you  have the he's marked on a chart this five-minute  

chart shows that you may have been waiting two or  three hours for that to actually kick off it's not  

necessarily something that happens right away  there's also something known as a round number  

phenomenon a round number bounce if you will and  a lot of times what traders will do is they will  

look for round figures so in this case we'll just  put one point zero nine and you can see this has  

caused a little bit of support what they'll do is  something like put a stop loss five or maybe even  

10 ticks below and then try to play for a bounce  you can see that you got a 10 tick move here took  

about an hour to get there it's very quiet trading  at this moment obviously but you see how this is  

an area that large institutions come in and they  tend to pad these areas at the end of the day  

the most important thing is that you're going  to need to trade in a manner that you're very  

comfortable with if that's going to be the case  then there's a certain amount of psychology and  

comfort that's needed to be a scalper and that's  probably true with any system but especially true  

with a scalping system even though again it's  not a long-term trade you're setting up for it  

you may be waiting a while for that trade to set  up so while scalping is thought of as being really  

quick it's not necessarily constant action rather  it is quicken it in and out when you are active a  

lot of this is waiting for the right setup so in  a bit of irony some of the most patient traders  

are the successful scalpers which isn't how its  presented but that's the reality of the situation  

use a demo account come up with our ideas of your  own and make them their own make sure to test them  

and then once you have enough confidence in the  results you'll be able to scout the market as well