Primarily there are two trading styles in forex trading: Short term and long term. Short term trading is done when positions are opened and closed on an intraday basis. Long term trading positions may span a few weeks or a few months.

Scalping is one of the methods to trade forex on a short term basis. It is a trading style where small price gaps created by bid/ask spreads are exploited. It normally involves opening or closing a position within a few minutes or even second.

Scalping is based on the fact that most of the time the market is ranging. Ranging means there is no significant price volatility. A scalper tries to make 2-5 pips per trade.

The best time for scalping is when the market is consolidating and ranging like when between the close of the US market and the open of the European markets, forex markets tend to range for hours without much movement. This is the time when scalpers like to trade.

Share This