What is the Adantage and Disadvantage Of FOREX Scalping
FOREX scalping is one of the most popular trading strategies in the foreign currency exchange market. Many traders use this as their primary method of trading. With scalping, you are employing a very short-term method of trading. You get in and get out of the market quickly. This type of strategy has some advantages, but it also carries with it some dangers.
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Benefits
- Limit risk--On each trade, you are risking only a small percentage of your account. Most short term trades have a small stop loss value, and therefore, you can protect your assets better.
- Make fast profit--With this strategy, you can make a substantial amount of money in a very short period of time, if you know what you are doing.
Dangers
- Requires high accuracy--With this type of strategy, you are going to have to have a very high win percentage. Since each trade brings in only small profits, you cannot make up for losses with a big trade on the way.
- Take losses quickly--Just as you can make profit quickly with this type of trading method, you can also lose your profit just as quickly. If the market is going against you, you could really lose a lot of money in a day.
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