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How to trade forex scalping?
Scalping is one of the most intense trading styles in existence, but also one of the most demanding. This scalping strategy attracts many novice traders with the promise of quick profits, but it requires extraordinary technical expertise and trader psychology.
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If you're wondering how to trade scalping, or whether this trading style is right for you, this article will enlighten you. We'll explore the specifics of what scalping is, its benefits, its pitfalls, and above all how to get started with a structured trading method.
Scalping isn't for everyone - let's face it. But for those who master this fast trading technique, the opportunities can be numerous.
What is scalping in trading?
Scalping definition
What is scalping in trading? Scalping is an extremely short-term trading style that involves opening and closing positions in seconds to minutes. The aim is to capture very small price movements repeated throughout the day.
Unlike day trading, which can hold positions for several hours, scalping aims for tiny but frequent profits. A scalper may open 50 to 200 positions a day, looking to make 2 to 10 pips per forex trade.
This scalping strategy is based on a simple principle: multiply small victories to achieve a positive overall result. It's fast-paced trading that demands maximum concentration and near-perfect execution.
Scalping vs. other trading styles
To fully understand what scalping is in trading, we need to situate it in relation to other trading styles:
Scalping (seconds to minutes) :
- Time unit: M1, M5 maximum
- Target: 2-10 pips per trade
- Frequency: 50-200 trades/day
Day trading (minutes to hours) :
- Time unit: M15, H1
- Target: 10-50 pips per trade
- Frequency: 5-20 trades/day
Swing trading (days to weeks) :
- Time unit: H4, Daily
- Target: 50-300 pips per trade
- Frequency: 1-5 trades/week
This comparison shows that scalping is the most time- and attention-intensive type of trading.
Who is scalping for?
Learning scalping is not for everyone. This trading style is aimed at a very specific profile:
Ideal profile for scalpers:
- Availability: At least 4-6 consecutive hours per day
- Temperament: Calm under pressure, reactive, disciplined
- Experience: Solid command of technical analysis
- Technology: ultra-fast connection, high-performance platform
Who should avoid scalping:
- Beginner traders with no experience
- Those with full-time jobs
- People stressed by quick decisions
Important information: If you're just starting out, start with the swing or day trading before considering learning scalping. This scalping technique requires an expertise that only experience can provide.
The basics of scalping
Time units for scalping
The choice of time unit is crucial to successful scalping. Timeframes that are too long are not suitable for fast trading.
To get started in scalping, start with M5, which offers an excellent compromise between signal and market noise. This 5-minute time unit offers sufficiently legible movements to analyze set-ups without the excessive pressure of ultra-short timeframes. Although it offers fewer opportunities than M1, it allows you to calmly learn the mechanics of scalping and develop your trading reflexes.
Once you've mastered M5 with consistent profitability, you can gradually work your way down to M1. This 1-minute time unit maximizes opportunities and offers very precise movements, but also generates a lot of market noise and imposes a high level of stress. M1 is reserved for experienced scalpers able to make instant decisions and handle psychological pressure.
M15 can be used as a transitional time unit for those wishing to get started in scalping. Signals are more reliable and stress considerably reduced, making it easier to learn the basic concepts before venturing into shorter timeframes.
Essential tools for efficient scalping
How can you scalp without the right tools? This scalping strategy requires impeccable technical equipment.
Trading platform :
Your platform must offer ultra-fast execution of less than 50ms to seize opportunities. Tight, fixed spreads preserve your margins on small movements. The interface should allow you to place orders quickly and intuitively. Latency-free real-time charts form the basis of your instant analysis.
Key technical indicators :
The 5-, 10- and 20-period short moving averages identify the immediate trend. The RSI, set to 14, reveals overbought and oversold zones. MACD provides momentum signals to confirm your positions. Bollinger Bands measure volatility and signal price expansions. Support and resistance levels form your target reference zones.
Technical configuration :
A fiber connection is the minimum required to avoid critical disconnections. A dual screen is recommended to monitor several charts simultaneously. Your trading plan and trading journal should be open at all times.
Suitable broker :
Tight spreads of less than 1 pip on EUR/USD. Market or ECN execution guarantees total transparency without broker intervention. The absence of re-quotes avoids order rejections at crucial moments. The fee structure must be perfectly transparent, with no hidden costs;
Risk management in scalping
Scalping risk management must adapt to the high frequency of trades.
Risk management rules :
Limit yourself to a maximum of 1-2% of your capital per trade to preserve your account over the long term. Your stop-loss should never exceed 5-15 pips to control losses in this fast-paced trading. Set a take-profit ratio of at least 1:1 or 1:1.5 to ensure positive profitability. After 3 consecutive losses, take a mandatory break to regain your lucidity. Keep a rigorous trading diary to analyze your performance and make progress.
Psychological management :
Define your daily target in advance to avoid greed or revenge. Stick to your trading plan without exception, even if an opportunity seems irresistible. Stop trading immediately if your loss exceeds 5% of capital in one session. Mastering your trading psychology is essential for survival in this ultra-competitive environment.
Impact of fundamental analysis :
Avoid trading 30 minutes before and after major economic announcements, which generate unpredictable volatility. Keep a close eye on key economic indicators such as NFP, CPI and key rate decisions. Adapt the size of your positions according to the global economic environment and geopolitical tensions. Integrate fundamental analysis into your overall strategy to anticipate market movements.
This strict discipline separates profitable scalpers from those who quickly lose their capital.
What scalping strategy should you adopt when you're just starting out?
A simple way to get started: trend scalping
Here's a proven scalping strategy to get you started and learn how to trade scalping effectively.
Basic configuration :
- Time unit: M5 (beginner) or M1 (advanced)
- Major pairs: EUR/USD, GBP/USD, USD/JPY
- Sessions: London (8am-12pm) and New York (2pm-6pm)
Indicators used :
- EMA 20 (trend)
- RSI 14 (momentum)
- MACD (confirmation)
- Psychological levels (00, 50)
Conditions of entry PURCHASE :
Price above EMA 20
RSI between 30-70
MACD line above signal
Price return on EMA 20 with rebound
Growing volume
Conditions of entry SALE :
Price below EMA 20
RSI between 30-70
MACD line below signal
Price rejection on EMA 20
Growing volume
Position management :
- Stop-loss: 10 pips under/over EMA 20
- Take-profit: 10-15 pips
- Trailing stop: Optional after +5 pips
This scalping technique works because it follows the main trend while entering temporary corrections.
The most common technical indicators used in scalping
In scalping, certain technical indicators are particularly suited to short time units.
Top 5 indicators for this scalping strategy :
1. Moving averages (EMA)
The buy signal is triggered when the short EMA crosses above the long EMA, indicating a change in trend. The advantage of this indicator is that it is easy to interpret and particularly reliable on clear trends.
2. RSI (14)
An RSI below 30 indicates an oversold zone favorable to buying, while an RSI above 70 indicates an overbought zone favorable to selling. Its excellent entry timing makes it an invaluable ally for taking positions.
3. MACD
The cross between the MACD line and the signal line generates your position entry signals. Its advantage lies in its ability to confirm the strength of the move before you commit yourself.
4. Bollinger Bands
When the price touches one of the bands, it suggests a possible reversal towards the central moving average. This indicator gives you a perfect view of the expansion and contraction of market volatility.
5. Stochastic
The crossover between the %K and %D lines in extreme zones (above 80 or below 20) provides your reversal signals. Its high reactivity to changes in direction makes it the ideal tool for scalping.
Expert advice: Maximum 2-3 indicators to avoid analysis paralysis. Simplicity is the key to learning scalping.
The advantages and limitations of scalping
The benefits of fast trading
Why choose this scalping strategy? Scalping offers unique advantages.
You'll benefit from numerous opportunities, with 50 to 200 potential signals per day, multiplying your chances of winning. Risk control is optimal, as your exposure remains limited and you avoid overnight risk altogether. Learning is accelerated thanks to immediate feedback on every one of your trading decisions. Real earnings potential as you capitalize on daily market volatility. Flexibility allows you to adapt quickly to changing market conditions.
Disadvantages and pitfalls to avoid
Scalping also involves significant risks.
Psychological stress can be intense, with significant mental fatigue and a real risk of burn-out if you don't manage your pace. Transaction costs mount up quickly as spreads and commissions multiply with the frequency of trades. Technical requirements are high, as you need a high-performance system with an ultra-fast connection. Capital requirements are higher than for other strategies, to compensate for recurring transaction costs.
Common pitfalls :
- Over-trading (too many positions)
- Revenge trading after losses
- Neglect of the trading plan
- Ignorance of risk management
This fast trading technique requires strict discipline and in-depth training.
Practical tips for learning scalping
Demo account training and practice
Learning scalping requires a methodical approach.
Phase 1: Theoretical training (2-3 months)
- Mastery of technical analysis
- Understanding the economic calendar
- Study of trader psychology
- Specialized scalping reading
Phase 2: Practice demo (3-6 months)
- Demo trading system test
- Rigorous trading diary
- Discipline development
- Statistics analysis
Phase 3: Micro real account (3-6 months)
- Live feed with minimum positions
- Validation in real-life conditions
- Emotional management
- Fine-tuning the trading plan
Mistakes to avoid:
- Going live too fast
- Neglecting the psychological aspect
- Ignore performance statistics
Develop your own scalping technique
Once you've mastered the basics, develop your own scalping strategy.
Elements to customize :
- Choice of assets 2-3 pairs maximum, tight spreads
- Time adaptation Optimum performance slots
- Technical optimization : Rigorous backtesting, adjusted parameters
- Psychological development : Pre-trading routines, stress management
Improvement process :
Daily trading journal analysis
Identifying performance patterns
Adjusting the trading method
Test modifications in demo
Progressive real-life implementation
Final tip: Scalping is a marathon, not a sprint. Build your scalping technique gradually. Patience in learning will determine your long-term success.
Conclusion
Scalping is one of the most technical trading styles there is. This scalping strategy is not for everyone, but for those who are serious about it, it can offer unique opportunities.
Before you jump in:
→ At least 2 years' trading experience
→ Perfect command of technical analysis
→ Capital and tools available
→ 6-12 months dedicated solely to apprenticeships
Scalping is a technical profession that takes years to master. If you have the right qualities, this trading technique can become a regular source of income.
Never forget: in scalping, discipline and patience in learning are your best allies for success in this exceptional trading style.
Jonathan Bardon
Professional trader since 2012, Jonathan is our trading instructor at our trading school.
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