Most people try to get rich in a short time and they use any plans possible. If you are not new in this industry, you should know the name of scaling strategy. It is a strategy where traders keep their trades open for few seconds and with high position size. When trader scalp, they expose their account to high risks and if the trades go wrong, you can lose all your investment. This does not stop people from investing in scalping and it is increasing every day. There is a debate between the traders if they should scalp or they should avoid this strategy. This article will try to answer your question by telling you both the pros and cons of scalping. It is no doubt that it is an attractive plan where you can make a profit in a short time but you also have to keep in mind the possible risks. If trades go wrong or you fail, there is no way you can overcome your loss. This article will try to explain these things and clear the dilemma of scalping strategy.
Those who are professional in the retail trading industry never take unnecessary risk. They always focus on the conservative trading style and the trade market with the extreme level of discipline. Some of you might be following other people trading system but this is not the perfect way of trading. You have to understand the risk factors and develop a simple trading system. Try to learn the art of price action trading system since it will help you to execute quality trades.
You should do it if you are confident, have enough skills and knowledge
Confidence is the key to success. If you are confident that you can pull off amazing profit in such a short timeframe, you can start scalping. However, the risks should also be your concern. People who scalp have vast knowledge about the market trends. They also have a rich history of their past trades and they have got the skills required for scalping. As you trade in seconds, you need to be very precise in trading and close when you have made your profit. With perfectionist skills and rich knowledge, you can make money with scalping if you have the confidence. This is how you can make money without waiting like the other traders. Be very smart when you trade with your real online trading account. And always try to be safe when it comes to investment business.
Having said all of that, there are also some disadvantages to scalping. Everything has a bad side and this strategy has more cons than pros. Read the next part of this article and you will find out if it is really worth the risks.
Dodgy, expose to high risks and need precise trading
The trends can be tricky at times. You may think the price is going upward and as you plan your trade and place the trade, the trend will go against you. As scalpers do not have the chance to keep their trades open like the positional traders or swing traders, you have to be very precise in your trading. A small mistake can cost your capital. Forex itself is a risky industry and scalping only add peril to it. Do not get overconfident in your capability. If you do not have any past history of consistent profit, do not go for scalping. It requires high precision and timely execution of trades. If you are late for even a moment, you can lose your money. You also need experience of trading in volatility as all scalpers have to place their trades in volatile trends. If you compare with risks to reward ratio, you may get an answer that it exposes your deposit to incredible risks. Not all people have that smart intuition to react blazingly fast and scalping is not for all.