Forex markets have always been on a roller coaster ride with highs and lows in the value of currency. This has made it quiet lucrative for forex trading as it involves buying and selling of currency. But before venturing into forex trading one must keep a few things in mind. The first and the foremost is to get you basics right by having complete knowledge on the subject. Second one must not put too much money at risk as the free markets are highly volatile. There it is wise to invest what you can afford to lose in case adverse conditions arise. Check out the лучшая стратегия для скальпинга на форекс

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What is Forex Trading?

Since there is a movement in the value of currencies in the forex markets this makes it an ideal situation for many to benefit from the trend. Similar to like other financial products one can trade in foreign exchange as well just by speculating the price trend. For example, if you think there will be rise in the value of particular currency then you buy it. Similarly, if you feel there will be a decrease then sell it. But for successfully trading one must keep a tab on the financial news to speculate trends in a better way.

How is Forex Trading Done?

In the process of understanding how forex trading is carried the first and one of the most basic thing that is currency pairs and how they work. Trading in foreign exchange is always carried out in pairs where one currency is termed as the base and other counter. For example, when you wish to trade Euro against dollar the currency pair is termed as EURO/USD. Euro is termed as the base that you wish to buy by selling dollars which is called the counter. Once you get the basics right the first step to trading is opening an account with a forex broker. The process is quiet simple wherein you have to fill in an application form with the required details and transfer funds in to your account. The payments can be easily carried out via credit or debit cards and wire transfers.

Types of Forex Traders

Timing plays a crucial role while participating in the forex markets for trading and based on this the traders can be classified into four major categories. These are named as day traders, swing traders, scalpers and position traders. The most common form of traders that one can find in the forex markets are the day traders. They believe in not holding the trade for a long time and finish during the day with a profit of loss. These types of traders mostly rely on volatile currency pairs to make profits and are called as short term traders. Unlike the day traders there is another category called the swing traders who like to hold on to the trade for a longer time which can be even for several days. This type of trading requires the traders to dedicate a couple of hours every day to analyze the market. Next in the list are position traders known to hold the trade for the longest time frame which can be a few days, weeks or even years. Apart from these three there is a fourth classification of traders are called Scalpers. Their main objective is to hold on to the trade for a few seconds to few minutes. This can be a good strategy for beginners as the risks are less in comparison. The article further discusses some of the best strategies that could help you make profits in such type of trading.

Introduction to Scalping

As discussed above this is considered as a very good strategy for beginners but it requires certain amount of time and concentration. This is because the strategy involves opening certain position gaining a few pips and the closing the trade. These types of traders are usually involved in more than 100 trades per day. Therefore it is important to pick brokers with smaller commissions and spreads to make profits. Since large numbers of trades are involved this might seem to be a tedious trading type but with little concentration and subject knowledge this can be quiet profitable. There is automated softwares available calming to assist in such types of trading. But one should be aware and avoid falling in such pitfalls. Learn about the лучшая стратегия для скальпинга на форекс

How to Scalp Forex?

The first step to becoming a good scalper is to choose the right broker since he has an important role to play in determining the profitability of your trade. Hence it is important to choose one who is highly competent and efficient with state of the art tools to help you make profits. The next step is to choose currencies you would wish to trade as all of them might not prove to be profitable for scalping. In order to become a successful scalper one must carefully observe the market for profitable trading conditions and not just randomly enter the market to start trading. It is always advisable to invest in currency pairs that are not prone to very sharp movements and should be more liquid and less volatile. Some of the ideal currency pairs for trading involve EUR/USD, GBP/UDS and USD/CHF. These are the most widely traded currency pairs and are often associated with larger trade volumes and slow movements. Once you decide on the currency it is important to determine the best time for scalping and this will largely depend on the technical strategy employed.

The first profitable time period for scalpers is 7am-8am EST when the market is choppy. This can be a good time to exploit small oscillations in the price. Another profitable time period is between 8am to 10 am EST when the New York, London and Frankfurt markets open. These are considered to be the most liquid and volatile period of the trading day. To convert these into profitable conditions one must concentrate on employing appropriate strategies. If you are scalper who prefers cal and slow markets 3pm to 7pm EST is the best time.

The Hidden Risks of Scalping

Scalping can be a lucrative trading style for many but it has its associated risks as well. Since it is quiet short term in nature good instincts and fore sight is required as one can run into losses. Also the type of trading might require large deposits. Since a large number of trades are involved this can be quiet a time consuming process. Before venturing into scaling it is important to weigh the pros and cons.

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