Scalping is basically the trading method used by traders on the floor and future actions. They use the order book to make small profits but many. That they can with their speed of execution and transaction costs very low. The concept of scalping has now expanded to many players taking positions in a short duration of time.
Many beginners try their hand at scalping but it's actually a trading style of the most difficult to master. Indeed, the scalping requires concentration and a very high execution speed, there is no room for hesitation. A scalper must have a very high resistance to stress. Scalping is all the more difficult it is generally done with a high leverage of about 100 to 1000 which does not forgive mistakes.
The Forex market is one that lends itself quite well in scalping because it is very liquid and transaction costs are very low. The control of these transaction costs is very important as they can quickly gain a strong impact. Indeed, a scalper will very often gain of 5 to 10 pips or less so the spread will impact strongly enough performance. The scalpers are therefore working on the currency pairs as the most liquid EUR / USD, GBP / USD and USD / JPY.
The choice of trading hours is also very important. The scalpers prefer the European session and even the portion extending from 2:00 p.m. to 6:00 p.m., during which European and U.S. traders are in action, because it is the most volatile period so that the scalpers offering more opportunities and also spreads below.
The loss control is very important in scalping because gains are low. The scalpers usually have high success rates, but if they do not cut their losses they will not make money over time because only one loss too much can sometimes undo the gains of a full day or even a full working week.
The scalpers typically use graphics ticks, or 1 minute and operate the support and resistance.
One advantage of scalping is that the scalpers are not dependent on market conditions, as markets evolve in range or medium-term trend, they will find opportunities. Another advantage is to take many positions. Indeed, for a long term trader winner, plus the number of positions is great plus impact the performance but the risk of ending one week in negative decreases, the number of positions smoothing results. The last advantage is not to keep the position for a long time, scalpers were therefore free mind after the workday ended.
In summary, scalping is a very difficult style to master, which requires a lot of composure and availability but for a trader gains experience opportunities can be very interesting.