Scalping is one of the most popular strategies in the forex market. This strategy involves making several quick trades, in a single day, usually lasting minutes or seconds. The goal of scalping is to earn low profits by relying on small price changes. Investors focus their attention on getting in and out of the market quickly, so it's important to have a proper internet connection. Scalpers aim for even the smallest price fluctuations, so proper analysis and the ability to make quick decisions are important.

Scalping and its methods

Scalping is a method based on short-term price fluctuations, so it is important to use the right analysis. One of the basic ones is technical analysis, which is based on RSI and Stochastics indicators. They are used to assess whether the currencies in question have already been bribed. For a thorough analysis of the patterns taking place, candlestick or tick charts are a useful tool, which provide the basis for observing the changes taking place in the market.

It is important to remember about fundamental analysis, as it is the key to the proper allocation of funds. Keeping track of economic and political news allows you to better predict possible economic events that affect price formation.

Scalping and its data

Scalping is based on data that can be used to accurately determine the entry and exit points of a given trade in order to make a profit. By analyzing in a technical way, scalpers collect data on:

  • prices and charts – a key role is played by a thorough analysis of prices and charts, which cover a short period of time, e.g. about 1 minute. This allows you to correctly identify patterns and determine the points at which appropriate action should be taken.
  • technical indicators – this is an important element that helps to determine the current situation on the market and potential changes in prices. Most often, indicators such as RSI, Stochastics or MACD are taken under the microscope.

The second important component is fundamental analysis. These are primarily economic data, such as macroeconomics, economic indicators, or inflation or unemployment rates, and other factors that have a significant impact on price changes. It is worth observing the geopolitical events taking place. Decisions of central banks or political events also affect price changes. At the Webinar Universe, we have informed many times that the speed of order execution is an important element, which is very important in a strategy such as scalping, spreads, or transaction costs incurred. The amount of commission, swap or additional costs have an impact on the amount of earnings in scalping. The platform should work smoothly, giving you the opportunity to observe the situation on an ongoing basis.


A strategy only for professionals?

Scalping is famous for its ability to make quick profits, but this does not mean that this method is reserved only for professionals. Due to its dynamic nature, it is worth gaining experience by investing so as not to make basic mistakes. Scalping is not the easiest strategy, and the main obstacles are:

  • the ability to make decisions quickly, which can be difficult for people starting their adventure with investments. Constant observation of price changes is crucial.
  • Psychological pressure plays a big role in making the right decisions that result in the right profits. Constant entries and exits can create a lot of pressure for people who are just starting to learn about investing. The key is high resistance to stress and decision-making despite the presence of difficult emotions.
  • Proper risk management is an important aspect in scalping. Making multiple moves requires precise risk management. Hasty and ill-considered decisions can lead to capital losses.
  • Taking into account transaction costs is sometimes overlooked by novice investors. You need to carefully calculate commissions, spreads, and potential costs to see if a decision is a profitable venture.

Using a forex strategy

The scalping strategy can be successfully used in the forex market, but you need to follow a few basic rules necessary to make profits. A fundamental aspect is proper education. Before you start investing, you should familiarize yourself with what a given strategy is all about, what its advantages and disadvantages are. The best way is to follow websites dedicated to investing, read manuals, or participate in online training. When investing in the forex market, you need to choose the right currency pairs. Some of them will bring us less profits, but they are more stable and recommended for beginners. These include the Euro and the USA, or the USA and JPY. They are characterized by price liquidity and are not exposed to high jumps.

Every forex trader should conduct a thorough technical analysis, which is the basis of a scalping strategy. We have translated them many times during the online trainings on Webinar Universe. Observation of indicators, candlestick patterns or trend lines makes it easier to identify the best moments to enter and exit a trade Proper risk management and market monitoring is an inseparable element of scalping. It's a strategy based on short time frames, so the reaction must be quick and precise.