Category: News

How Scalping Technique is Reshaping Forex Trading

- Andrew

Forex scalping is a forex trading technique where a forex trader participates in vast trade niches to consolidate the different profits earned.

It allows a trader to risk on many forex trade pairs thereby increasing chances of widening the profit base. Forex scalping has both pros and cons and is completely dependent on what the forex trader aspires.

This article attempts to look at various facets of forex scalping to fully understand the underlying concepts.

Merits of Forex Scalping

Widened Profit Base

Forex scalping allows a trader to increase his or her profit base. This allows a trader to focus on diverse trading niches without specifically narrowing it down to a single trade pattern.

It allows a trader to rely on varied chances instead of setting dependence on s single trade. Traders who participate in forex scalping take high-risk chances, unlike specific traders. With a good stop-loss order, a trader can maximize his profits in forex scalping compared to other forex strategies.

Higher Profit Chances

Forex scalping allows a trader to reap big from wins generated on various niches. With diversification, the likeliness of a forex trader reaping immensely is increased.

Forex scalping is more likely to favor a forex trader because trading is always volatile. This means that out of the set trading markets a trader invests in he or she is assured of some profits in the long run.

Capitalization

A forex trader is able to capitalize on finances created from high liquidity and volatility levels. Capitalization is important to a trader because forex trading moves out quickly in a set bar from initial to completion stages.

The rapid trade movements mean that a forex trader is able to capitalize on the trades and make high returns.

Low Loss Risk

Forex scalping has low-risk chances. This is possible due to the breakdown of trade to segments that are independent of each other. Even if losses are generated on some trades, in the long run the forex trader has high chances of reaping profits from forex scalping.

Demerits of Forex Scalping

Just like any other forex strategy, scalping has several disadvantages associated with it. The most common disadvantage of forex scalping includes

Diverse Information

Because forex scalping is a technique that involves short margins trades, a forex trader needs to fully understand the timings to place the trades. Failure to understand the underlying trading information can lead to disastrous losses.

Forex scalping trading relies on sharp volatilities that are common on major currency pairs. For example, during major financial announcements, a nation’s currency might quickly flop or rise for short periods before stabilizing.

These are requirement trading points where forex scalping can be applied. When a wrong interpretation is made on the financial-economic ripple effect based on the major announcements huge losses could result.

Short Timeliness

Forex scalping is suited for traders who invest shortly on trades and pull out of it. This means that a trader can suffer setbacks associated with failure to find diverse information to trade.

In most scenarios, the trader does not use various technical indicators to make judgments because of time limitations. This could result in devastating losses most of the time.

The short timeliness prompts forex traders to use high stakes when pitching up on the trade pips with aim of making profits. In the long run, making losses on the high stakes can be detrimental to the forex trader.

Cumulative Trading

Forex scalping requires that the trader be always on the watch out to invest. Additionally, in order to maximize the profits, the trade uses profits earned to invest on more volatilities and trade pips.

In the long run, the time breakdown can be emotionally stressful to the trader because it requires a trader’s complete timely involvement over time. The final profit in forex scalping is mainly calculated after the timely breakdowns are over.

Forex scalping because of the volatility levels means that a trader cannot be on the trading sphere for a long time. This calls for keen trading chart analysis.

Conclusion

Forex scalping has both pros and cons. Its prevalence depends on the forex trader’s choices. It is equally important to understand the timing variations in order to fully utilize forex scalping.

Mixed sentiment in the oil market as the new trading year starts

- Andrew

There has been a massive chaos in the energy field in the last year. All the leading investors in the global world was in fear to see the sharp fall in the price of oil. The excessive supply in the production of oil is forcing the investors to lower down the price of oil in the global market. Due to variations of the demand and supply line in the financial market CFD trading was extremely difficult in the last year. Even the price of coking coal was suffering from bearish pressure in the global market. But things settled down to a great extent in the global economy after the Chinese government initiated 275 working day policy on the coal miners. Due to restriction in the production of coal, the price of coking coal surged higher in the global market. After that, the OPEC member decided that they should restrict the bearish movement in the gold price in order to bring stability in the energy field. But most of the OPEC leaders were overly cautious about their plan. Meanwhile, during that interval, the oil price suffered an extensive loss in the global market.

Read more

Dollar becomes broadly weaker against its major rivals upon mixed economic sentiment

- Andrew

The dollar has been dominating the market after the prudential election on 8th November 2016.The ongoing economic performance and positive statement from the president of USA gave the dollar a strong bullish momentum in the market. However, on last Friday the dollar become broadly weaker against its all major rivals in the forex market upon the release of the major economic news. On last Friday the dollar closed at 1.0667 against its major rivals EURO in the forex market. The sharp decline of the U.S dollar has been triggered by the poor performance economic performance in the last week. According to the labor Department, there has been a sharp fall in the U.S wages in the month of November and the Non-farm payroll data came negative then the expectation. The forecasted job lot opening was 180k whereas the actual data came as 178 k which also turned the strength of the dollar in the global market.

Read more