Scalp trading is also called scalping and represents a trading strategy that helps the individual make a profit from small price changes. It’s also worth noting that scalping involves having a very good exit strategy. Otherwise, the entire profit will be lost. In short, this type of strategy is all about your decision-making skills and how well you can handle your emotions.
Besides that, in case you decide to go for scalping as your strategy, you must abandon all of your other trading plans. We know that the golden rule is to never do that but, in this case, it might be necessary. Scalp trading involves taking advantage of the fast price changes that might occur. So, a long-term strategy doesn’t have its place here.
How to do scalp trading
When doing scalp trading, you might think that performing it on a currency pair that has high volatility is the best idea. In fact, this is not what scalping is about. Never put all of your eggs in one basket because minor price changes are what you’re looking for.
The best idea, in this case, is to start analyzing certain forex pairs and eliminate them one by one. Always keep away from inflation-prone currencies because of their high volatility. Remember, you need to avoid that at all costs!
Instead, go for a relatively stable pair that you can analyze and predict rather easily. For example, the USD/EUR pair is one of the best choices because of its large trading volume and narrow range.
There are certain disadvantages to this pair too, one of the biggest being the fact that the USD is backed by the US central bank, the federal government, and treasury. The EUR is not backed by any such government and is prone to crisis. It’s also not as widespread as the USD. These are situations that you should consider when picking a forex pair for scalping.
The best forex pair to scalp
However, probably the best currency pair to use for scalping right now is GBP/USD. Firstly, they have a lot in common, like the legal systems of the two nations as well as their common language. Plus, the pound performs very well against the dollar and it offers fair chances to scalpers to make a profit.
Even with the recent US stimulus package and the Brexit, scalpers will not be affected. However, keep in mind that scalping is not a long-term trading strategy. It’s a short-term plan that could bring you gains as long as you know what you’re doing.
Scalping and being successful at it means foreseeing various price movements and taking advantage of them. However, “foreseeing” is maybe not the correct term seeing how there is a lot of analysis involved in this. Keep in mind that scalping is all about winning small and frequently instead of having big gains.
Speaking of forex pairs, it’s time to talk about an online trading broker that could help you in your efforts to trade successfully. Who knows, maybe you will even try scalping with their help. Royal Noble Group is a value-driven CFD and crypto trading online firm that prides itself on transparency, honesty, efficiency and, most importantly, places the clients, regardless of their experience level, at the top of the priority list by offering the best possible quality of service.
Traders should be aware of the fact that Royal Noble Group has six different categories of accounts that they can choose from. It also has three different trading platforms as well as a collection of features that will definitely make you interested. You can find out more about what this broker offers by accessing its official website.