logo |

News

    Home   >     Industry    >     Main body

    Do Scalpers Make Money?

    Abstract:In speaking of scalping, you may have questions like “Is there anyone who makes money by scalping forex?”, “Can it really be done?!”

      In speaking of scalping, you may have questions like “Is there anyone who makes money by scalping forex?”, “Can it really be done?!”

      Most investors love long-term trading. The more time your money stays invested, the greater the opportunity for compounding and growth. But this type of trading could also have disadvantages. The longer you are on a trade, the more vulnerable you become to price reversal. It‘s hard not to feel a little disappointed when you aren’t making enough winning trades, or are experiencing a severe drawdown.

    1.png

      Scalping just like long term trading depends entirely on one's personality. The key factor that does not discriminate on the trading method is patience. Choosing the right entry point as well as exit is crucial no matter what trading strategy you choose.

      An Example of Scalping the EUR/USD

      Assume a scalper trades the EUR/USD using a trend trading strategy. They identify the recent trend, wait for a pullback, and then buy when the price starts moving back in the trending direction.

    2.png

      Depending on volatility, the trader typically risks four pips and takes profit at eight pips. The reward is twice the risk, which is a favorable risk/reward. If volatility is higher than usual, the trader will risk more pips, and try to make a larger profit, but the position size will be smaller than with the four pip stop loss.

      Assume the trader has a $10,000 account and is willing to risk 0.5% of their account per trade. That means they can lose $50 per trade. They are risking four pips. Each standard lot ($100,000) equates to $10 in profit or loss per pip. Since the trader is risking four pips, they can trade 1.25 standard lots ($50 / (4 pips x $10)). If they lose four pips on 1.25 standard lots, they will lose $50 which is their maximum risk per trade. Their profit is double, so if they make eight pips, they will earn $100.

      The account has $10,000 in it, yet they are using a $100,000 position size. This is 10:1 leverage.

      The following chart shows three trades, based on the recent trend direction. The first trade is a winner for eight pips, or $100. The second trade is a loss for four pips or $50. The next two trades are winners for eight pips, or $100 each.

    3.png

      The overall profit for the day is three winners ($300) minus one loser ($50), or $250. On a $10,000 account that is a 2.5% return for the day. This shows the compounding power of scalping. On the flip side, finding winning trades isn't easy, and even with risking 0.5% of the account per trade, if the trader doesn't have a sound method, losses can mount quickly.

      As a leading media in the forex industry, WikiFX offers overall and accurate regulatory information of global forex brokers, and provides educational content to help people learn how to become profitable traders. Download and read more on WikiFX App: bit.ly/wikifxIN

    Malaysian Ringgit

    • United Arab Emirates Dirham
    • Australia Dollar
    • Canadian Dollar
    • Swiss Franc
    • Chinese Yuan
    • Danish Krone
    • Euro
    • British Pound
    • Hong Kong Dollar
    • Hungarian Forint
    • Japanese Yen
    • South Korean Won
    • Mexican Peso
    • Malaysian Ringgit
    • Norwegian Krone
    • New Zealand Dollar
    • Polish Zloty
    • Russian Ruble
    • Saudi Arabian Riyal
    • Swedish Krona
    • Singapore Dollar
    • Thai Baht
    • Turkish Lira
    • United States Dollar
    • South African Rand

    United States Dollar

    • United Arab Emirates Dirham
    • Australia Dollar
    • Canadian Dollar
    • Swiss Franc
    • Chinese Yuan
    • Danish Krone
    • Euro
    • British Pound
    • Hong Kong Dollar
    • Hungarian Forint
    • Japanese Yen
    • South Korean Won
    • Mexican Peso
    • Malaysian Ringgit
    • Norwegian Krone
    • New Zealand Dollar
    • Polish Zloty
    • Russian Ruble
    • Saudi Arabian Riyal
    • Swedish Krona
    • Singapore Dollar
    • Thai Baht
    • Turkish Lira
    • United States Dollar
    • South African Rand
    Current Rate  :
    --
    Amount
    Malaysian Ringgit
    Available
    -- United States Dollar
    Risk Warning

    The Database of WikiFX comes from the official regulatory authorities , such as the FCA, ASIC, etc. The published content is also based on fairness, objectivity and fact. WikiFX doesn't ask for PR fees, advertising fees, ranking fees, data cleaning fees and other illogical fees. WikiFX will do its utmost to maintain the consistency and synchronization of database with authoritative data sources such as regulatory authorities, but does not guarantee the data to be up to date consistently.

    Given the complexity of forex industry, some brokers are issued legal licenses by cheating regulation institutes. If the data published by WikiFX are not in accordance with the fact, please click "Complaints "and "Correction" to inform us. We will check immediately and release the results.

    Foreign exchange, precious metals and over-the-counter (OTC) contracts are leveraged products, which have high risks and may lead to losses of your investment principal. Please invest rationally.

    Special Note, the content of the Wikifx site is for information purposes only and should not be construed as investment advice. The Forex broker is chosen by the client. The client understands and takes into account all risks arising with Forex trading is not relevant with WikiFX, the client should bear full responsibility for their consequences.