5 Facts you Need to Success in Forex Scalping

Forex scalping and day trading is more popular than ever and is the choice of most new forex traders but is it the right one and how do you enjoy forex scalping success - lets find out.

1. Short Term Volatility is Random

Millions of forex traders trade trillions of dollars in currency each day and to say that you can measure what this diverse number of traders will do in a few hours, or a day is laughable you cant.

2. Support and Resistance Levels are Meaningless

To trade any market you need to have valid levels of support or resistance to key off however with all volatility being random in short term trading, prices can and do go anywhere and support and resistance cannot be used - as the data simply isn't valid.

3. No Trading system Will Work

It doesn't matter how good or well thought out the trading system is - if volatility is random and support and resistance not valid it wont work!

In any financial market to win you need to trade the odds and if you cant, you are going to lose longer term. It's a bit like being in a casino - if you can count the cards in a game such as blackjack you win but in a game of pure chance like roulette, play long enough with the odds against you and your going to lose and it's the same in forex scalping.

You cant get the odds on your side and you cant win - PERIOD

4. Forex Scalping Systems Don't have Track Records

Yes they do many traders will say - I have seen them. Sure they have and written all over the track record will be "hypothetical" or "simulated" This means it wasn't traded in the market but done on paper knowing the closing prices!

How hard is that?

You could do it and so can I and even my 10 year old daughter could - but the markets don't work backwards its harder - You have to trade going forwards!

5. Why is it So Popular?

Because it makes a good story and vendors know this.

Most of them have never traded in their lives - but the story of small regular profits and low risk is an easy one to sell, to naive or greedy investors who are looking for an easy way to get rich in forex.

Of course there is no easy way to get rich in forex and you wouldn't expect there to be, with the rewards on offer.

The Winning Forex Scalping System

Forex scalping is a short term method of day trading and forex scalpers are looking to take small profits regularly by timing moves on hourly charts. The idea is to only take small profits but get lots of them, to build profits over time and earn a big consistent income. There are lots of forex scalping systems for sale but how do you pick a winner?

The first thing you need to do, is look at the track record of the scalping system presented to you and check for a disclaimer. If you see the one below ( or one with a similar wording), you need to forget the system and look at others. Here it is read it carefully:

Basically, the above means the forex scalping system has not been traded and the vendor has simulated the track record in hindsight. A disclaimer like this, tells you nothing about the profitability of the system, as of course if we all knew tomorrow's price today, we would ALL be rich!

Making money in hindsight is easy, but we don't have that advantage in the real world.

Now you may be thinking well that's obvious enough - I Will just find a real time track record of forex scalping profits.

Scalping Forex Market for Huge Profits

Many traders enjoy scalping the forex market and there aim is to accumulate a large number of small profits to build long term profits. Let's look at how to enjoy forex scalping
success...


So there you have it - there made up paper profits, knowing the closing price history, well that's not hard - the hard bit is trading going forward and not knowing the data!

So all the scalping systems you see have made up track records on paper which have never been traded - check any sold online and you're sure to find the above disclaimer.

So why doesn't it work?

The reason is simple:

There are literally millions of traders, all with different aims, objectives and experience, trading the market and what this vast diverse mass does in a few hours cannot be measured.

All volatility is random and the data cannot be used, you may as well flip a coin.

Even with the above fact in place forex day trading is based on another dumb idea. Taking small losses (wise idea) and cutting profits (dumb idea) of course you need to run your profits to cover your inevitable losses.

When day traders are lucky enough to be sitting on a profit what do they do - Cut it!

So - High percentage of small losses + Small number of small profits = Equity Wipeout

The logic of day trading will see you lose and many vendors know this but it's a good story and sells forex trading systems and that's why you see so many that have never been traded, accompanied by clever enticing copy, don't fall for them.

If you still believe that forex scalping or day trading makes money, try and find a long term track record and you will be in for a long search!

You can make money trading forex - but you must trade the odds and you can't do that within daily time frames.

Risk and Profits

Forex scalpers aim to make small regular profits and in time build this up to a large income. Forex scalping is very popular and here we are going to look at how not to lose your money at it.

The best way not to lose money is not to even try it - it doesn't work, before we explain why you may wonder why you see so many courses and people claiming big gains so here is the answer - the gains are paper gains and not real money.

Huge numbers of traders make the final price and they all have different motivations, skills and levels of emotion that input into their trading and to say this huge mass can be predicted in short time frames is ridiculous.

Not only do you have the above to contend with but forex scalping breaks a fundamental rule of trading:

Run your profits to cover your inevitable losses.

All trading systems have losses and drawdown periods and you need to run your profits to cover them. Now scalpers do get profits (everyone is lucky some time) but what do they do - Do they run it? Not a chance they bank it!

Of course luck doesn't last for ever and if you are trading with the odds against you your on borrowed time and will lose eventually it's just a question of when.
So if you want to keep your equity intact don't forex scalp - trade longer term and get the odds on your side. Sure, short term trading sounds great but the odds don't stack up it's a wonder that sane intelligent people in other walks of life think they can win with a made up track record and a system costing a few hundred bucks.

You can make a lot of money trading but forex scalping is doomed to failure - trade longer term, get the odds on your side and win.