QUOTE(sleepwalker @ Mar 10 2010, 02:48 PM)
There are plenty of traders out there making a living out of scalping. Everybody knows that the longer you leave the trade open, the more riskier your trade becomes as it is expose to more uncertainty. Trading on H4 as you mentioned is not scalping. Scalpers do not use buy-stop and sell-stops. We open at market price.
One part of scalping is when I buy on dips as the trend goes up. If a trend move 50 pips, I can make 70-80 pips out of that as I keep opening trades on every dip as the trend goes up and moving the other trades to BE. So even when the market moves 50 pips, I make more than 50 pips out of that move.
I realised that the more I trade, the shorter my time frame and the more scapling I do as I can see the price action better with experience. I don't have to open a position and wait for it to move anymore. I know when it is going to move and open accordingly. After a while it is a very simple guessing game of when peaks and valleys will form. I can do as much as 20 trades in 2-3 hours during scalping periods. Scalpers make money irrespective of whether it is trending or ranging. I remember the days of doing day trading and not opening any positions when it is ranging. Such a waste to watch the market go up and down but not opening any positions. Now I can sell at every peak and buy at every valley.
The best part of scalping is the education you get from it. Of course you have to spend more time at the markets when you scalp but consider that as tuition fees. The more time you spend at the market, the more you learn.
It's odd that some people are not willing to spend 2-3 hours per night on forex. Here is something for the people to ponder. It took most of you guys 6 years of primary school, 5-7 years of high school, 3-4 years of university before you can come out to work and make a living. Some people think that they can master forex by spending 30 mins every night for a few months. Oh.. they are so so wrong.
I got your point. Its not that I condemn scalping perse. Its just that many beginners jump straight into the shorter timeframes with the promise of making huge profits in a short amount of time.
In order to make money on the lower timeframes u have to be very nimble with your trades. You wont have much time to analyze price movement and this will go against the inexperienced trader.. Its also a very stressful way to make money. The longer timeframes are more predictable.. There are alot of information in every pivot point. Trading is all about managing risks, and it is easier to manage risk on H4 and D1. You are trading with the majority.. big money will eat small fish for lunch.
The main difficulty in trying to successfully scalp Forex market is to exercise the discipline needed to quickly cut off losing trades. It is the reason why a lot of Forex traders will fail with a scalping Forex trading strategy. Unless you have lay out a detail mechanical system OR you have a good profitable EA that is profitable day in and day out in any market condition (highly unlikely) it is very unlikely for the newbie to make money using this method.
Another thing that I do not like about scalping is that some of the method used is more towards "gambling" and not trading. These methods includes news trading, London open trading, martingale etc etc.. which is very risky. Newbies are not interested to read price action.. We are more attracted to the colorful and complicated indicators.
Screen time is important to attune yourself to the markets movements.. but it can be counterproductive because we will have this illusion that more screen time equals more profits. I know this from experience, you will open a position just because you can. Any bad setup can be a good setup if u want it to be.
Feb 18 2010, 11:02 PM
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