In today forex faq, we have a question from one of our fellow traders.
Below is the question:
I love scalping and I have tried different methods. My number one problem is I am constantly losing. So can you advice me on how to scalp the market and get my profit target?
There are a few reasons why you are constantly losing when scalping the forex market. Therefore there are a few things that you need to know in order to be able to make money from scalping the forex market.
1) Precise Entry – As scalping is a short term trading method, you will usually enter and exit your trade within minutes. Therefore your point of entry is very crucial.
Because of the tight stop loss in scalping strategy, you will usually find yourself stopped out if you are unable to enter at the right time.
Therefore if you want to make money with scalping strategy, you will have to time your entry precisely. One good way of entry will be making use of strong level of support and resistance.
If you are able to find level where there are a confluence of various support or resistance level, it is a good point of entry as the price will most probably be repelled by that level.
2) No Reliable Scalping Strategy – Another reason why you are constantly losing could also be due to the scalping strategy you are using.
Have you tried using the strategy on a demo account? You must have the habit of testing out your strategy on a demo account to make sure that it works before you start trading it on a live account.
Therefore my suggestion to you now is to test out this strategy that you have on a demo account for at least 2 to 3 months and then see the results.
If it is not making you money, then you must discard this strategy and start learning a new one.
3) Lack of Discipline – Another possibility is that you have a reliable strategy but you are not following it completely. If you find yourself entering trades even when the setup is not completely the same as your trading plan, you are suffering from this problem of discipline.
It is very important for a trader to be able to stick entirely to his/her strategy. It is the only way you can make consistent profit every month.
I hope that I have answered your question and do feel free to give your comment if there is anything you want to let me know.