Currency Scalping – Is it a Viable Trade?

Currency basically refers to a global foreign exchange market where currencies from the global community are brought and then sold for a profit. Currency scalping is a trade in which a trader looks to buy a currency pair for a very short time period, usually for a few minutes, and then sell it for a profit. The basic aim of a Currency scalper is to make lots of trades at once and make little profits from each.

What is a Currency Pair?

When you buy or sell currency, what you basically do is to buy one currency and sell another. The currency listed before the slash in a currency pair is the base currency – this is the currency you intend to buy or sell – the one after the slash is the quote currency – this is the price you pay to buy one unit of the base currency e.g. EUR/USD pair.

The Currency Scalping System

In currency scalping, after going through a technical analysis to know if the price of a base currency will go up or down, the Currency scalper either buys or sells the currency. This technical analysis may be manual where you look for “signs” and predicts whether a currency is to be bought or sold, or use a software program to look for and interpret these signals.

Factors Affecting Currency Scalping Strategies

  1. Market Liquidity: The liquidity of a market for trade is crucial for Currency scalpers as they aim to cash in on very short term trades immediately, an essential strategy for successful Currency scalping.
  2. Volatility: It has a directly proportional relationship with effective currency scalping; the more stable a market, the better it is for Currency scalpers, who benefit from short term fluctuations in the market.
  3. Time Frame: As Currency scalping is all about timing, it involves quick and successive trades where the right time frame can make all the difference and a primary scalper tends to utilize only on one-minute charts.

Is Scalping for you?

Scalping requires you to concentrate on one or two minute charts, so you have to make quick decisions and must not regret quick losses too. If you are someone who likes to examine and take your time to make a decision, this isn’t a good option for you.

You Need to Pick a Broker

Before you find a forex broker, make sure you go for a Tax ID application first. Once you find a reliable broker, read the trader-broker agreement carefully to know your responsibilities and the obligations of the broker.

This is currently one of the most demanding trade strategies. It requires the fusion of several factors working efficiently, quickly and adhering to strict rules, and where management of money is crucial. It can prove to be highly profitable when you become experienced enough. This requires the identification of personal strategies, handling trades with small time frames and discerning patterns in the Currency market. If you master this skill, Currency scalping is a surefire way of success in the world of foreign exchange.

Save More Money in 2018

Coins 1523383 1920

Subscribe and join the worldwide 52-week money challenge! Get the tools you need right to your inbox.

We won't send you spam. Unsubscribe at any time. Powered by ConvertKit

Share this post:

Recent Posts

Leave a Comment


What’s the Best Free Recipe App?

The Apple Store and Google Play together offer more digital cookbooks than you probably have room for on your mobile device. So which... more →
New tax law might slow down housing market.

What Will the New Tax Law Do to the Housing Market?

The new tax law will have a profound impact on the housing market, although in ways that go beyond the deductibility of mortgage interest... more →

4 in 5 Households Will Get a Tax Cut in 2018

Four out of five U.S. households will get a tax cut as a result of the legislation that President Donald Trump signed into law today. more →
Will bitcoin reach $100,000?

When Will Bitcoin Reach $100,000?

Bitcoin has accelerated its pace of appreciation in recent months, and if the current levels between $15,000 and $19,000 make you itch... more →
The Dow Jones topped 24,000 -- now what?

The Dow Jones Crossed the 24,000 Threshold. Now What?

Stocks appear to be increasing in volatility, yet the markets closed on Monday, December 4 with the Dow Jones Industrial Average is... more →
Peer mortgage

Should You Get a Peer-to-Peer Mortgage?

If you can’t get approved for a home loan from a bank, you might want to look into applying for a peer-to-peer mortgage. more →
Investment gifting is awesome.

4 Things To Know Before You Donate an Investment

While donations of any kind are appreciated, gifting investments benefits both the giver and the receiver. Here are four key things... more →
Are you wondering: What's the Relationship Between the Stock Market and Federal Debt?

What’s the Relationship Between the Stock Market and Federal Debt?

Wouldn’t it be wonderful if gains in the stock market could actually reduce U.S. government indebtedness? If that were true,... more →
Pre-Paid Phone Plans, cellphone

What You Don’t Know About Pre-Paid Phone Plans

In a world full of expensive smart phones, being “grandfathered in” to unlimited data plans, and outrageous competition between... more →