Hey guys, been a while since I've checked in here. But here I do be! hah. Anyway, got a quick question for the newbie Forex scalpers here: What is the #1 thing you struggle with when it comes to Forex scalping?
Too many reversals on the short time frames. Look at all the wicks on 5-15 min candles and compare it to stocks or futures. You have to be a grandmaster of trade management. To know when you should be moving your stop loss to break even and not get psyched out when you get a seemingly improbable bad string of losses. You know how a lot of successful EA's run? They have incredibly wide stops. So when they have the improbable string, your account goes into incredible drawdowns.
Its okay, prefer to trade the DAX via a cfd but on crazy days like yesterday, gbpaud and eurusd have the right amount of movement and no issues. Gbpaud is generally the best mover and trender.
Easy for technicials to jump from currencies to indices and vice versa. Find the S&R's and trendlines on the chart and here you go! Doubt that fundamentals could walk in a stride processing such amount of information. As you said CFD's is good alternative to enter US markets rather than futures, etc., thankfully I have them at Hotforex, but the issue is that being a conservative trader hedging positions and splitting trading between several assets, sometimes I feel unable to tackle this task of working on fundamentals and take well-considered trade on each of them. Too heavy.. Could you share some trick to make it more smart?
My method works the same pretty much, behave slightly differently but nit a real issue if aware. As a intraday trader, fundementals have zero input what the market will do in the next 10mins anyway. I only trade 1 position at a time, high risk kinda guy so no idea there.
Unlike to your approach I prefer fundamental trading, though sometimes don't mind to resort to basic technical analysis. It takes less time to carry out as there is not much information to chew over, only price and volume. I consider lack of information as a main enemy of quality analysis that's why trying to embrace as much as I can. Maybe instead I add additional tangles to the scheme, but it works in that way.
Haven't got time, the account value, the understanding of Fundamentals, although I used to years back while trading stocks to a basic degree. That and I'm a very short term, near scalper, shorter your in the less you leave yourself open to random events. It's never easy!
You hit the point with that phrase. What I don't like about carry trading is that your account is exposed to ultimately high risk of random event which can drive markets mad and wipe your account. Though I trade fundamentals I prefer to stay no more than 3-5 min in open position as with the lot size I use (2-5 lots) its enough to trigger SL or close in profit. Moreover to level my transaction costs I switched to from Hotforex Premium to Fixed spreads account, so now I am not affected by slippage at all. But guess this measure is only for sharp spike traders..
I have an obsession with scalping as my primary methodology. So it's not a "casual" thing, and I've developed sophisticated software to handle scalping. Many will tell you they can scalp profitably, but it is not true without extremely specialized tools and techniques. Beware. The main issue with Scalping, as with any trading is Analytics. Moving Averages, and related approaches which use Price, like Price Ranges, and all of the other stuff in Forex, nearly all based upon Price... These are really nearly useless in Scalping. They are "lagging indicators" so you are always "too late". Only some form of a "leading indicator" works... The second major issue, once you have the Short Term Trend identified, and we are assuming you use an ECN fast brokerage as a given... The next issue is How you execute your Scalp sequences. You really must avoid going "all in" at a single Price but use Multiple Entries and partial Profit Takes in order to better control your Exposure and Risk. Anybody who doesn't do this, and says they are consistently profitable, most likely is being "economical with the truth". You also need semi-automatic triggering support of some kind, rather than thinking you can "click a mouse" fast enough, and suffering the fatigue and stress which comes with that. Also you can't "chase" the market in scalping, and many other considerations, depending upon the "granularity" of your scalping. I could go on about real Scalping, and the challenges of making it a profitable business but in general it requires very Specializ(s)ed and usually semi-automated methods, on the very best exchanges, using Analytics which are not generally available, aka "proprietary". Given all of this, I can say that it is an increasingly "viable" approach to Trading, with the emergence of high quality exchanges such as LMAX or Dukascopy ECN and the availability of relatively fast API access for the "ordinary" non-institutional trader. BUT, having said that, you'll likely fail unless you get very technical, and talk to the right people. If you wanna discuss, feel free... Good Scalping !! HyperScalper