SCALPING TRADE FOREX can be demanding says proforexroom.com

June 6, 2010 - PRLog -- Scalping Forex trades.  What is scalping, how do i do scalping, what are some scalping strategies, where can i find information on scalping the forex market and where do i go to learn about how to scalp the forex market.  These are the questions that often get asked of Proforexroom.com http://www.proforexroom.com

Scalping can also be called a quick trading. It is a method where traders allow their positions to last only for a matter of seconds, to a full minute and rarely longer than that.

The purpose of scalping is making small profits while exposing a trading account to a very limited risk, which is due to a quick open/close trading mode.

Scalping involves substantial risks

A lot of beginners have common problem when trading highly leveraged accounts – they tend to maximize profits by trading with full capital at once. Do not do that! Maximizing chances for higher profits goes hand in hand with maximizing risks! The size of positions opened must be calculated very accurately so that your entire account will not be wiped out with just one(!) very unfortunate trade.

Another factor that increases risks for scalpers is the spread traders pay when open a trade. Each time a new trade is open, the spread cost is paid to the broker, thus opening 10 small trades instead of 1 long term trade increases the cost of trading in 10 times.

If to measure risk/reward ratio of such scalping activity it may show very risky and potentially losing trading.

Once in the trade, scalpers should manage trading risks by:

moving stops to break-even as soon as situation permits;
taking profits at a logical levels: at round market price numbers: 00, 10, 20, 50 etc., at previous support/resistance levels, at Fibonacci levels etc.
getting out of the trade if the price freezes for longer time than expected.
Scalp-trading is very demanding, and requires a lot of concentration, constant monitoring of the price and very quick decision making. Also, short time frames used in scalping strategies, require a good grasp of trading complemented with sound technical analysis skills. It is not a place where beginners feel very comfortable as it demands from traders a good chunk of experience.

Proforexroom.com http://www.proforexroom.com offer a 14 day free pass to their trading room.  Simply register at the site for more information to a live trading room where you will see live trading happening during the European trading session.

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Whether your new to currency trading or a seasoned trader, proforexroom is designed to either teach or follow alongside the traders in the room. Proforexroom is a live currency trading room each day during the European fx session in English & Italian.