Scalping

Scalping is a short-duration strategy where orders are placed to scalp very small profits. The risk and the return on each trade is low, so the scalper needs to trade frequently so that enough profit can be made.

Scalping is possible in forex only thanks to the reliable liquidity, speed of execution and low spreads. In less liquid markets or with a substandard broker, it’s completely unworkable.

Scalping is a good strategy to start with – providing risk is managed properly. First it provides some excitement. With scalping you’re going in and out of the forex market little-and-often so it satisfies that itchy feeling of “wanting to do something”. Secondly capital at risk at any time is fairly low because scalpers will cut losses before a deep drawdown.