Forex broker – Scalping

Forex BrokerForex broker styles are usually defined after the trader has had some experience in the market and is then in a position to seriously consider variables such as time and available resources to devote to forex trading.
There are many different trading styles and market approaches that a broker can subscribe to, but most of them can be grouped in a small number of categories that boil down to varying degrees of exposure to the market.
Short term, high frequency trading, or scalping, is unlike short-term trading in most other markets. A short-term trade in stocks or commodities usually means holding a position for a day to several days at least. But because of the liquidity and narrow bid/offer spreads in currencies, prices are constantly fluctuating in small increments.
The steady and fluid price action in currencies allows for extremely short-term trading by speculators intent on capturing just a few pips on each trade.
Short term forex broker trading typically involves holding a position for only a few seconds or minutes, and rarely longer than an hour. But the time element is not the defining feature of scalping.
Instead, the pip fluctuations are what`s really important. A forex broker who follows a short-term trading style is seeking to profit by repeatedly opening and closing positions after gaining just a few pips, frequently as little as 1 or 2 pips.
Scalpers have to be among the fastest and most disciplined of traders, as they are out to capture only few pips on each trade. In terms of speed, rapid reaction and instantaneous decision-making are essential to successfully jobbing the market.
When it comes to discipline, the forex broker scalper has to be absolutely ruthless in both taking profits and losses. If you are in it to make only a few pips on each trade, you can´t afford to lose much more than a few pips on each trade.
Scalping requires an intuitive feel for the market, rather than worrying too much about the fundamentals. If you were to ask a scalper for his/her opinion on a particular currency pair, the answer would most likely depend on the exact time you asked, and could vary within minutes.
Successful forex broker scalpers have absolutely no allegiance to any single position. They couldn`t care less if the currency pair goes up down, as they are strictly focused on the next few pips. Their position is either working for them or they are out of it faster than you can blink an eye. All they need is volatility and liquidity.
In this sense, they trade only during times of peak liquidity and market interest with the most liquid currency pairs, such as EUR/USD, USD/JPY, EUR/GBP and EUR/JPY and focusing on one pair at a time, as they are aiming to capture second-by-second or minute-by-minute price movements.