Posted by forex at 1:49 AM
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1. 1: When it comes to forex trading, no amount of practice will make you perfect but it will help you get used to the quickness required when "scalping". Set up a practice account and use fake money to trade and monitor your progress.
2. 2: Be prepared to lose. The biggest pitfall scalpers experience is "revenge" trading. When you lose big, it frustrates you and causes you to make decisions that are irrational and more risky trying to make back that loss in one trade.
3. 3: Focus is the key to success. You must be able to sit down and not move away from your screen when using this method. Currencies can change by huge amounts in a matter of minutes. If you take your eyes off the screen for 5 minutes you could come back to see a trade you made that was up 100% or more, has fallen and taken your 100% profit and turned it to a loss.
4. 4: Act fast or don't act at all. When you see a trend, whether up or down, you must get in position immediately. If you miss a quick upturn or downturn, you are potentially missing profits and getting in too late.
5. 5: Watch trends for short term spikes. These peaks or valleys will show you how sustainable a rise or fall is and for how long. For instance, if the USD is falling against the EUR, past history will be able to tell you just how far it is likely to fall before making at least a short term comeback. Once it reaches this point of its fall, you can then buy- anticipating the rapid rise that happens when the currency makes the typical bounce back.