How do short-term traders earn?

All traders who trade on the Forex market can be a fairly high degree of accuracy divided into three categories: those who opens the long-term, medium-term and short-term positions. The choice of trading strategy depends on many factors (such as the nature, degree of employment, access to computer capabilities, the psychological aspects of the trader, and others.), And therefore, ultimately, everyone chooses that strategy, which is closer to him.

In this article, we will focus on traders, who tend not just to trade short-term (intraday trading or trading for a few days), but those traders who choose for themselves the extreme scalping strategy – the traders – “scalpers”. More specifically, we will focus on the strategy itself forex strategy “scalping”, with its pluses and minuses, profitability and potential pitfalls.

Choosing for yourself or that skalping strategy FOREX trader, thus preparing themselves for repeated opening and closing of transactions within a single trading day. The number of inputs depends on many factors, including the degree of aggressiveness of the method of scalping, the number used to trade currency pairs … and can be calculated by several tens and even hundreds or more per day.

Thus, scalping strategy assumes that the profits from each transaction will be relatively low, but on the day the income may look very impressive. Selectable trading time frames are usually minimal – minute – M1, five-minute – M2, fifteen – minute – M15.

Among the negative aspects of the considered strategy should include, first of all, a fairly high level of psycho-emotional and physical stress.You can find was for overcoming emotional stress in a forex trading online guide. This is due to increased requirements for control over the trading process, suggesting the presence of the trader at the terminal during the whole day and a constant concentration of attention on the behavior trends. Each of the many committed trader transactions must be tracked until they end, which is a prerequisite for correct closure and earning profits. In this regard, scalping – is increasingly becoming the Diocese of professional traders who have gained enough experience to trade in such a hard time.

Note that FOREX-scalping may be associated with a sufficiently serious costs, as the trader must have a constant amount of extra cash, to any suitable moment to be able to open a counter deal, overlapping incorrectly open order. Do not forget about commissions and spreads. Since scalping FOREX strategy meant the average profit of 5-10 points for each transaction, the spread of 3 points can more than halve the trader profits. In this regard for effective use scalping strategy priori trader should choose a broker with tight spreads (very desirable fixed) and commissions such as FreshForex has. Read comments about this broker in freshforex review.