Forex Scalping for beginners

Tuesday, October 9, 2007

Forex scalping is one of the most popular ways for new traders to get into forex trading and offers the appeal of regular profits and low risk. In this article we are going to cover all the facts related to forex scalping for beginners, so lets get started.

Forex scalping in essence, looks to trade within daily time frames making small regular profits, using tight stops to generate big profits overtime - the big problem is it has never worked and never will.

Why?

Because the logic it is based on is simply incorrect and if you read on, we will tell you why and show you the evidence, which shows why one of the best ways to lose money in forex trading is forex scalping.

Let’s take a look at the market first and how they move.

We have trillions of dollars traded daily, by millions of different traders and to say that you can say what this vast mass of traders is going to do in such a short time frame, as a few hours is laughable.

Fact:

All short term volatility is random.

This means that prices can and do go anywhere in a day – support and resistance levels are not valid, so it doesn’t matter how good your technical indicators are they will fail in this random environment.

I have seen successful track records though!

Sure you have – and their sold by vendors with a vested interest.

There are loads of them and they are all designed to bring forex scalping to beginners - for a few hundred bucks you get rich, sure you do.

Take a reality check!

These vendors make money selling forex scalping systems, NOT trading them - their far too clever for that.

What you will see is an unbelievable track record that shows great profits with little or now drawdown and common sense tells you that if it’s too good to be true and it most are!

Many traders however fall for the ploy and buy the system, lose and wonder why.

If they were to take a closer look at the forex scaling track records presented, they will see the words “hindsight” or “simulation” written all over the track record as a disclaimer.

What does this mean?

Well – the track record is done in hindsight and simulated, knowing the closing prices!

How hard is that?

My eight year old daughter could do that and so could anyone who can read and write and you can to – these track records are totally meaningless and really not worth the paper their written on.

You can of course find a real-time track record but you will spend a long time in your search – I have spent 25 years trying, so if you find one let me know.

The fact is forex scalping for beginners takes advantage of naive and gullible investors who think winning is easy and they don’t stop to think about the reasons these systems cannot and never will work

If You Want to Win

You need to trade the odds and that means using time frames that allow you to get the odds in your favour and this means trading longer term.

If you are a beginner at forex trading and want to get a forex education that will help you win look at forex swing trading or long term trend following here you work with valid data and can get the odds on your side.

Avoid forex scalping and forex day trading and like I said earlier if you find a real time track record let me know.