Brief Introduction

Forex scalping is also referred to as quick trading. It is a method by which traders allow their positions to last for only a matter of seconds to a full minute when trading. Any trader who holds to a position for more than two minutes is automatically considered a regular and not a scalper.

Reasons for Scalping

The main enticement in scalping is the ability to make profits while exposing your self to limited risks. This is due to the quick open and close trading format of scalping.
The ability to scalp depends on the size of your account. Only traders with large accounts can get the leverage needed to scalp constantly.  The availability of large still virtual money empowers a scalper to profit from even a 2-3 pip move.

How is Scalping Done?

Forex scalpers normally use trading charts on small time frames such as ticks at 1, 3, or 5 minutes. This is done with the aim of spotting quick trade entry and exits.
No scalper will hold overnight trades or execute trades that will require long time frames to extract profits. They are always on the look out for maximum liquidity and will not settle for any trade short of a quick sale.

Relationship with Brokers

Most forex broker reviews will tell you a lot of how they feel about scalpers. This is because any wins by scalpers represents equal loss by brokers. Some forex brokers are in direct opposition of this type of trading and will most likely refuse to deal with scalpers.
Others have devised smart ways to slow the scalper’s progress and performance. This is done by setting up delay tactics between order initiation and actual filling.
The logic behind this is that desk brokers need time to counter trade each other to lessen losses in case a trader closes in a profit. Since scalpers want quick deals, they are forced to retract and close the deal.

Underhand tactics aside, having an automated trading platform will let you trade comfortably without having to worry about scalpers.
Direct forex online trading software ensures straight through processing with no interference between traders and market makers.

Advantages/Benefits of Scalping

1.    Effective method of using capital with minimal risk per trade.
2.    High percentage win rate
3.    Suitable for impatient traders who are unwilling to spend long periods analysing the market
4.    Less risk in the event of sudden changes occurring in the market.
5.    The ability to trade in for any hours


Disadvantages of Scalping

1.    Accurate timing is essential for scalping
2.    Scalping is intense, draining and requires a lot of screen time.
3.    It requires in depth knowledge of market structure and order flow.
4.    It is unsuitable for spread betting as it can turn out to be quite stressful.
5.    It requires a substantial risk in terms of investments to realize sufficient profits.