You hear
both sides of the argument when you are talking about forex trading strategies.
There are those that swear you go short term or so called forex scalping, get in
and get out and move on to the next deal and then there are those that will
preach long term till they are blue in the face. While I personally prefer long
term, I want to explore short term trading or forex scalping today.
With all the years of experience that I have behind me in forex trading, I can
tell you with confidence that you can make money doing forex scalping, but it is
extremely challenging and will eventually take its toll on you.
Successful forex traders are great analyzers. You get data, you crunch it and
you spot a trend. The problem when trying to do short term trading is that by
the time you get the numbers crunched, the trend is here and gone. Or worse, you
are analyzing one and 5 minute charts and you think you spot something, but it
is really nothing more than a random movement. The chances if being whipsawed is
high, unless you have a very good forex trading system that can filter out the
whipsaws in the market.
When you take those hits, they usually hurt. You will find yourself going to
your stop margin more often than not and it will wipe away the profits that you
made with all of your small hits. There is nothing more discouraging than
winning 9 out of 10 times and having a losing session.
If you want to get involved in short term trading on the forex market, you
better learn to eat stress for breakfast, lunch and dinner. The nature of
trading short term means that you never have a second to relax and are
constantly taking heat. You are trying to digest one and 5 minute charts and
spot a trend before it changes.
Not only that, but as we just said, you can take one hit that will kill a weeks
worth of profits. Add it all up and you will have a lot of sleepless nights. You
like sleep, look at the daily trends, put your order in and walk away and let it
happen.
While most people fall in love with the action of the short term win, they need
to realize the name of the game is to win overall, not just on one trade. If you
realize that you can make significantly more by developing a long term forex
strategy that will allow you to spot one good deal that will make you much more
than a bunch of scalpers. Learn forex the right way by viewing it as a long term
business and you'll be on your path to financial freedom.
So if you want to do forex scalping, you have to ask yourself is it really worth
it? Something's gotta give. My experience has let me down the road of long term
trades because they are less stressful, easier to recover from and easier to
analyze. The business is stressful enough, why add to it?
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Written By Daniel Su, Expert Author and Founder of
ForexTradingPower.com
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