Forex scalping is a Forex strategy in which the trader intends to take profits quickly on very small pip movements. Usually the trade is entered and closed quickly, within minutes.
Forex scalpers make profits on quick 5 to 15 pip movements. After awhile, profits claimed on these small movements will add up.
The name "Forex Scalping" makes the stategy sound like it is risky. But the scalping method can be low risk when scalping strategies are implemented during the best times for scalping in the market. The best time to implement a scalping forex strategy is during times of market consolidation. Since the market is generally in a consolidation pattern 80% of the time, this suggest that Forex Scalping is a good strategy to choose and use often. Many new forex traders attempt to scalp the market during times of volatility or of news trading – but these times are much more risky for any strategy, including the forex scalping strategy.
As always the trader must always be disciplined and must determine ahead of time their risk management strategy. The Forex Scalping trader must decide to get out of bad trades when they have lower pip losses. Waiting for a hopeful recovery if the very short trade does not go as expected is not the way to go. It is best to take profits of small pips and also limit amount of pips the trader is willing to accept as a loss. Otherwise one larger bad trade could completely wipe out numerous smaller profitable trades.