Forex Scalping: High Profits and High Risk

Forex Scalping is a unique variant of trading activity in the foreign exchange market, on everyone's lips but at the same time not very widespread. It's on everyone's lips because it really allows you to make huge profits in a short time; it's not very widespread because it's very difficult to practice, almost impossible. Certainly, an out-of-the-ordinary preparation (not only technical) is necessary. But what exactly is Scalping? Scalping is defined as the approach that consists of opening and closing positions within a few minutes, thus using a narrow time horizon. From this simple definition, which among other things reveals its main characteristic, namely speed, it is possible to understand the opportunities and risks of Scalping.

Risks and Opportunities of Scalping

The biggest advantage of Scalping lies precisely in the potential profits, which are extremely high. The reason for this is intuitive. A normal trade, even if it's intraday, doesn't place one trade per day. Scalping, on the other hand, places an indefinite number of trades in a day, but certainly more than one. Three, four, ten, twenty... It depends on how good and resistant the trader is. In this case, it's the frequency that makes the profit. Scalpers cash in multiple times a day. We are talking, obviously, about potential earnings, or rather profits, which could very well be losses instead. And here we come to what is the biggest flaw of Forex Scalping, which is the high risk. Not that Forex, like any other online trading activity, is the favorite pastime of the prudent, but in Scalping the level of risk reaches much higher peaks. It's a bit like leverage: potential gains and potential losses go hand in hand, they are two sides of the same coin. The sad truth, which is then the reason why Scalping, despite fascinating more or less everyone, struggles to spread, is that it's really difficult to practice. First of all, because to generate profits it is necessary to exploit events that have a very narrow time window. It's obvious that in the short term, the price variations recorded at the beginning and end of a period of time are minimal. Therefore, the pips at stake are few and it is necessary to ride the volatility. This, rather than a risk, as for all other traders, is seen as an opportunity, as a source of profit. The scalper makes money with rebound effects. Now, to achieve this ambitious goal it is necessary to be extremely precise, to live by the motto of carpe diem. Nothing more difficult when handling money.

Who Can Do Scalping

It follows that the scalper's approach is completely different from that of a normal trader. The latter, in fact, plans and operates, giving more space to strategy and less space to operations. The scalper, on the other hand, while developing a plan, must give a lot of space to operations, since he acts in a context that is by its very nature an emergency. No one has ever seized the moment exclusively through preparation work. The trader, therefore, must be able to decide quickly and well, must therefore have considerable technical skills. All this increases the difficulty, which at this point is not only technical but also... Emotional. Operations, as we know, are a source of great stress for traders, as it is precisely in this phase that everything is at stake, that defeat or victory occurs. The normal trader attends the operational phase almost as an observer, perhaps as a controller; the scalper is in it up to his neck. And this generates a lot of stress, an emotional pressure bordering on unsustainability. In conclusion, it is clear that Forex Scalping is not for everyone. Those who practice it, in addition to being an expert in trading activities, must have a strong, cold personality, dedicated to courageous actions. In short, if Scalping is not a thing for supermen, it's not far from it.