There are many different kinds of trading strategy which you can follow to trade the currency market. You might even buy thousand dollar trading strategy from the most successful traders in the forex market but there is no guarantee that you will become a profitable trader in the financial industry. The success rate in the forex trading industry is pretty low compared to other business in the world. Out of every 100 traders, only 5 of them are making consistent money in the online trading world. So who are these 5 percent people? These 5 percent are the world class trader who has the perfect knowledge in the financial sectors. They always follow strict trading discipline and for this very reason, they are able to make a profit regardless of the market conditions. The market can be traded in two different time frames and that is the higher time frame and the lower time frame. Lower time frame traders are called scalpers and it is a very risky trading strategy. So if you are scalper than we will give you some amazing tips which will enhance yours trading performance to a great extent.
The 4 hour time frame
Most of the scalper in the forex market tends to trade the lower time frame. But it’s not a fixed rule that you will have to always use the smaller time frame to scalp the market. In fact, the expert traders often use the higher time frame to execute short-term high-quality trades in the market. The expert traders at Saxo suggest the novice traders use the 4 hours’ time frame to scalp the market as it tends to give the best short term trading opportunity to the traders. But this doesn’t mean that you will always use the 4 hours’ time frame to trade the market. The whole idea is that you don’t need to trade the lower time frame to scalp the market.
Multiple time frame analysis
Multiple time frame analysis is very much popular among the professional traders in the options trading industry. The forex market is extremely volatile and full of false spikes. So if you think that you can get away with the false spikes then you are completely wrong. In order to get the best possible trade setups in the market, you need to focus on quality trade execution. To find out the best possible trade you need learn the art of multiple time frame analysis. As a new trader you might find it a little bit difficult to do the multiple time frame analysis but if you stick to your devotion than within few week you can easily master this skill. Once you learn the perfect art of multiple time frame analysis you can scalp the market with the extreme level of accuracy.
Limit your risk
Most of the novice scalper take a huge risk in trading. So when they face few consecutive losses they almost lose more than half of their trading account. In order to survive the market, you need to limit your risk exposure in the financial market. Always to take only 2- 3 percent risk of your trading capital. If the trade goes wrong then never try to recover your losses rather take the day off and wait for the next trading opportunity. Trading is all about managing your risk in an efficient way. If you know how to limit your risk then you will see that this is one the best place to make money. But as a professional scalper, you should never trade during the high impact political speech as most of the time the market exhibit wild swings and wipe the open orders.
Summary: Scalping is extremely profitable especially if you know how to manage your risk in the market. As a professional scalper, you should always follow strict discipline and trade the market based on your rational logic. Always control your emotions and focus on quality trade execution.