Is Scalping a good trading strategy for South African Forex traders?

By: Chime Amara

What is scalping？

Scalping is a forex trading strategy whereby traders hope to catch the immediate market move when they spot a given pattern in the market. It is an important strategy used by short-term position holders. Often scalpers hold their positions from three to fifteen minutes. They target only 5 - 30 pips.

Advantages of Scalping

· Offers opportunity for making quick profits

· Scalpers tend to make more daily profits than day traders.

· Scalpers often targeted the safest entries which allows them to use bigger lotsize.

· Traded using

· Easy to learn and recommended for beginners.

Disadvantages of Scalping

· It is a risky strategy.

· Traders are tempted to choose big lotsize

· Consumes time and energy

· Not allowed by all brokers

· Could lead to a great loss should there be a sudden spike in the opposite direction.

· Leads one to neglect the importance of risk management

· Causes lots of worries and anxieties for the trader

What is the best timeframe for scalping？

The best timeframe for scalping is the fifteen minutes timeframe. However, every scalper must first identify the daily market trend using the larger timeframes including the weekly and monthly timeframes before proceeding to indulge in the daily scalping.

Which pairs are best for scalping？

The best pairs for scalping are the highly volatile pairs such as Gold, Bitcoin, EURUSD, and indices. Other less volatile pairs do not offer the desired fast movement that enables scalpers to catch quick pips in the market.