Learn Forex: What Is Scalping in Day Trading?

Many Forex day traders refer to themselves as "scalpers." But what exactly is scalping in the Forex market? Here's a quick look. You might be familiar with the term scalper. Ticket scalpers, for example, purchase tickets at face value, and then turn around and quickly sell them for slightly more to turn a fast profit. In foreign currency trading, the idea is similar.

Forex scalpers make many quick, short-term trades throughout the day with the goal of capturing a few pips in profit off of each trade. Typically, Forex scalpers stay in positions for very short timeframes, as little as a minute and no longer than five. The key to profiting is volume. Using this trading style, scalpers open dozens or more positions each day, because they're just scalping a few pips off of each trade. The more trades: The more pips they capture.

Scalping in Forex: Pros

If profits are limited to a few pips on each trade, why do traders choose this style of day trading? What are the benefits of scalping? For starters, successful scalping can help a trader accumulate profits and compound an account faster. The key though is winning a majority of daily trades and using leverage appropriately. A high win-rate coupled with aggressive leverage can add up fairly quickly.

Plus, scalping greatly limits the trader's risk exposure. Forex trading can be extremely risky, as large market fluctuations are unpredictable. Therefore, staying in positions longer opens a trader up to an increased level of risk. With scalping, trades are opened and closed quickly, and thus, scalpers can limit their exposure to large market swings. Additionally, the majority of scalpers do not leave positions open overnight, so there's no overnight risk involved. But although risk is limited, these short-term trades do create some disadvantages.

Scalping in Forex: Cons

As scalpers open and close trades on short timeframes, the opportunity to take advantage of large swings and capture larger profits is greatly limited. Unlike trend traders who try to make large profits off a single position, the scalper can typically suffer from the "missing out" effect, because they miss those big swings that can be widely profitable if they would have stayed in the trade longer.

Additionally, scalping is time consuming. It requires the trader to have razor-sharp focus on their open positions, always be ready to open and close trades, and be tracking price movements constantly. In effect, scalpers are married to the charts during trading hours, and must open and close trades over and over again throughout the day. Longer-term traders can open a position, and walk away until they're ready to close the position.

Finally, scalpers must always watch the spread between the bid/ask prices. Because scalpers may make 5-10 pips in profit off of a trade, larger spreads can quickly wipe out those profits. Therefore, spreads are much more of a concern for scalpers, compared to longer term traders.

For some, Forex scalping is the strategy that they prefer. It limits risk and the trader wins more trades. But it does offer some disadvantages. Traders should consider the pros and cons of Forex scalping before committing to this high-frequency style of day-trading.

Article Source: http://EzineArticles.com/9268170

Forex Strategy: What Is Fibonacci Trading?

Many day traders use Fibonacci retracement lines to determine entries and exits into the markets, as well as stop loss and take profit targets. Fortunately, the strategy is fairly easy to understand, but first, you'll want to learn about the numbers it is based on.

Essentially, the retracement lines are derived from the Fibonacci Sequence - which was discovered in the 13th Century by Italian mathematician Leonardo Fibonacci. The sequence is a series of numbers that occurs naturally in many different processes in the natural world. The first two numbers in the series are 0 and 1. Then, you can calculate the subsequent numbers by adding the last two numbers in the series together. Thusly, the sequence is:

0+0 = 0
0+1 = 1
1+1 = 1
1+2 = 3
2+3 = 5
3+5 = 8
5+8 = 13
And it continues on in this manner
Finding the Golden Ratio of Fibonacci Trading

Using these numbers, you can derive a series of ratios, which are very important in Fibonacci trading. You can find the "Golden Ratio" by dividing any number by the subsequent number in the series. For example, 13 divided by 21 is .619 and 21 divided by 34 is .617. In other words, the Golden Ratio is roughly 61.8 percent.

Additionally, two other ratios .382 and .236 are also used in Fibonacci Forex trading. These numbers are found by dividing two alternating numbers to find .382, like 144 and 377, and the .236 ratio is found by dividing a number by the third number to its right, like 5 and 21. So that's the basic idea behind the Fibonacci Sequence.

But now, you're probably wondering how the series and ratios are used in Forex trading.

Using Fibonacci Ratios in Forex Trading

To successfully use the Fibonacci retracement lines, you first need to do some technical analysis on recent charts. For example, if you use the 1-hour chart, take a look at it and see if you can find an uptrend or a downtrend. Once you've found a mature trend, you should draw a line at the top and bottom of the trend. This represents 0 and 100 percent. Then add in the Fibonacci retracement lines at 23.6 percent, 38.2 percent and 61.8 percent.

If it's an uptrend, the lines will start from the top - with 23.6 percent nearest the top of the chart - and for a downtrend, the Fibonacci lines start near the bottom, with 23.6 nearest to the bottom.

These retracement lines serve as support and resistance levels. So, if the trend was at the top of the chart, in theory, it would dip towards the 23.6 percent resistance level. If it does not break this level, you know that it's likely to jump back up, before retesting the 23.6 percent level. If the 23.6 percent line is broken, the next support level becomes 38.2. Thusly, the value of the currency pair would test the 38.2 level.

In other words, the retracement lines serve as reference points on the charts to help day traders determine entries, exits, stop loss and take profit targets.



Article Source: http://EzineArticles.com/9294783

Forex - Beginner's Guide to Useful Terms

Pip: Price in Points, this is the single digit at the end of a currency pairs price. If the EURUSD changed from 1.5000 to 1.5001, it moved up 1 pip.

Pair: Currencies are always quoted in pairs. Examples, EURO and US Dollar are always quoted as EURUSD, US Dollar and Swiss Franc are always quoted as USDCHF.

Margin Requirement: A sort of security deposit that is set aside and unavailable when you open a position. Should the open trade erode the rest of the equity in your account, the trade would automatically be closed leaving only the margin requirement in your account.

Available Margin: The amount in your account hat is available to open up more positions. The equation would look like something like this - Equity - Open position value - Margin requirement = Available Margin

Balance: The Realized value of your account. Sometimes the account balance will be higher than the account Equity due to the value of Open trades.

Equity: The Unrealized value of our account. This is generally shown as the Balance + Open trade value

Rollover: At a set time in each session around the world, depending on where you are, interest is either paid or charged based on open positions. This happens at 5 PM EST in NY for US customers.

Spread: The difference between the Buy and Sell prices that a broker or bank is quoting. The spread is what the broker charges you to get in to the trade. Although there are sometimes other costs depending on the broker.

Pip Value: Without going into a detailed explanation and giving you the equations, pip value is the value of a pip in your accounts default currency. I have a US denominated accounts, a single pip up or down for the EURUSD is equal to USD $1, in my mini account and USD $10 in my standard account. The pip value of the USDJPY is USD $1.1 for my mini account and USD $11 in my standard account.

I have a daily blog that discusses this type of forex knowledge on a daily basis. I help individuals learn to mine data for the best trades. Thomas Edison said "I never did anything worth doing by accident, nor did any of my inventions come by accident; they came by work."



Article Source: http://EzineArticles.com/3433643

Quantum Binary Signals Subscription

                      
                    Quantum Binary Signals Subscription 

Quantum Binary Signals Is The Leading Signals Provider For Binary Options Forex, Stocks And Commodities. Promote Quantum Today To Start Generating High Monthly Cash Flow And Get Banners, Key Words And Articles That Will Bust Your Sales !
click here to download

CASH BANK -TREND EA- EXPERT ADVISOR SCALPING AGRESSIF- Easy to Use

       TREND EA- EXPERT ADVISOR AGRESSIF SCALPING 

Receive your free version by sending the code BANK CASH Pm 49076 to Ghostserveur2@gmail.com

Forex Trading Strategy For Beginner Forex Traders

Forex trading strategy for beginner forex traders shall be different from amateur forex traders! In general, there are 2 types of forex traders: the fundamental traders and the technical traders. Fundamental FX traders monitor the news and updates about economics and currency market very closely because their reaction against the market sentimental is their winning factors. However, how would a new beginner forex trader know what is good news or what is bad?!

The second group is called technical traders. Technical forex traders will not look at the news to decide their forex trading, but they depend on numbers, figures and various analysis on the forex market. Some foreign currency traders even use various forex indicators or forex signals to help them decide their trading in forex market. However, can a beginner forex trader learn everything necessary before entering into the volatile forex market?

Most financial schools or forex training courses will teach new forex traders template strategies. Due to the large foreign exchange currency market, more than 3.5 trillion US dollar in a single day, the forex market has a trending nature. The forex secret for beginner traders is just follow the trend...

The currency market tends to be overbought or oversold conditions for a long time. Therefore, just follow the previous trend, if the new forex trader does not how to measure the trend.

The next forex secret is that a beginner forex trader shall not be greedy or aim to profit too much. For many foreign exchange currency traders, especially those new in forex trading, to buy at the lowest and to sell at the highest in the currency market or vice verse is their aims. However, these foreign currency traders have forgotten that they are not GOD! Only GOD can know the lowest and the highest all times... So, a daily 20 pips to 50 pips profits for new forex traders is considered a good part time extra income, isn't it?

As a human trader in forex market, we can lower our risk in trading forex by taking small profits (PIPs) within a small time frame (short period of time). Shorter time frame like 15-minute (M15), 30-minute trade (M30) or even hourly trade (H1, H4) have less risks, compared to longer time frame like daily trade, weekly trade or monthly trade. Rather than aiming 200 pips to 500 pips in longer period, which sometimes may not happen in weeks or months before it hits target profits of a forex trader, just consider to target 30 pips a day. If the profit trades are consistent, in 20 days trading in forex market (a month period), the forex trader would have accumulated 600 pips profits already!

The most important successful factor for new beginner FX trader is to learn trading of foreign exchange currency online before anxiously entering into the volatile FX market. Best to is get a coach or mentor who can literally hold the new trader's hand and show step by step method to trade for living!

George ONG is a renowned motivational speaker, a successful entrepreneur, an investor (forex trading & property) & a JCI community leader in Malaysia. After finding a speedy wealth vehicle in trading forex, George has been trading for profits on daily basis and having the freedom to trade for living! Today, George is passionately sharing his forex trading experiences with friends so that more people can create wealth & achieve financial freedom via forex trading.




Article Source: http://EzineArticles.com/3614060

Vladimirs Srs Trend Rider

                            Vladimirs Srs Trend Rider

Top Trader Vladimir Ribakov's Strategy For Extracting Profits From The Forex Market, With A Push Of A Button. A Hybrid Strategy Which Includes Manual As Well As Automated Components. Includes A Recurring-billing Upsell Of Automated Signal Execution Robot.
click here to download