Scalping is Risky?

[Devin larrson]

Scalping is based on tech. analysis and short term price fluctuations. Due to the extensive use of leverage, scalping is considered a high risk style of trading.

 

[AbbotAle]

Scalping is based on tech. analysis and short term price fluctuations. Due to the extensive use of leverage, scalping is considered a high risk style of trading.

Leverage always translate to the risk, not the timeframe.

Plenty of scalpers use little or no leverage, plenty use high leverage.

Plenty of longer term traders use little or no leverage, plenty use high leverage.

 

[HolyGrailSeeker]

What do think scalping is risky? Some people sat that scalping is risky strategy and you can loose your money very fast? Is it right?

The best way to know is to backtest your strategy

Most people will lose money very fast in this game whether they scalp or do any other form of trading.

Reason? Sadly most people are real dopes ESPECIALLY the one's under 25 years old. They rush into the game, understand little, know even less, and above all don't realise that the people they're trading against have often taken years to perfect their craft.

As an analogy read a few books on the Law then go up against some heavyset lawyers in court and see how you get on. To say you'll be laughed out of court is a gross understatement.

No different with trading but so many think they'll be able to not only match the heavyset traders but take money from them (overtime).

If you want to get into trading and make a real go at it, be prepared to spend YEARS on your craft otherwise it's almost certain that your money will gravitate to the people who have taken the time...

The funny thing is that people don't take trading as serious as other professions. It you are going to be a brain surgeon you won't pick up a book on brain surgery
, Read a few pages and immediately think you can operate on someone. It takes years of study and practice as a medical student to reach that level.

Yet on the other hand, everyone who picks a trading book thinks there are going to be millionaire in a year and that they are going to beat the hedge funds who hire the smartest people in their field and the algos etc..

 

[DevBru]

What is happening to this forum .

Noobs are taking over.

 

[KCalhoun]

In my opinion, scalping and intraday trading are quite different. I love to intraday trade. I trade 2 futures contracts, but take risk out on one position and move my stop to breakeven. If I were to scalp, I would close both positions simultaneously. There is much less risk when you take risk out on multiple contracts.

Smart post, agree..

Scalping is the riskiest type of trading because it requires large size and very accurate entries and exits. Usually less than a few minutes roundtrips.

I prefer intraday trades of anywhere from 20 minutes to several hours.

 

[solartimes]

Scalping is very risky when you do not consider the factor of learning and under impression on how it works. Scalping is a very quick technique of getting profit in short time frame.

 

[GrowleyMonster]

IF YOU KNOW WHAT YOU ARE DOING, it is low risk, low profit. A few bucks here, a few bucks there, holding positions for minutes or even seconds... seems like such a grind, to me. But it's all about picking your entry so you start out in the green, and not giving up anything. Stop loss set high and tight when you place your order. Walk it up quickly so it is above your break-even point as the stock goes up. Set a limit sell order for exiting and taking profit, don't be greedy. A trailing stop is another way to exit. Hotkeys are VERY useful when scalping. No time for fiddling with a mouse or typing a bunch of crap and confirming the order. You need good data flow, quick order execution, zero or extremely low commissions.

The habits you develop scalping can make you a more effective day trader in general. Just sayin.

 

[Stephen Andrew]

i think any trading system can be difficult to bring profit with certainly , if you dont have real risk management policy.

 

[DepthTrade]

What do think scalping is risky? Some people sat that scalping is risky strategy and you can loose your money very fast? Is it right?

I had been taught that true scalping is for the smallest price increment, which in forex is 1 pipette, 1/10th of a pip. Most people think of scalping as intraday, but there is a difference. Scalping for the most part is impossible, because of the spread which puts one at an immediate disadvantage. Intraday is theoretically possible, but runs into the similar R/R problems. Totally possible though, you just have to be razor sharp.

 

[SimpleMeLike]

What does scalping mean in terms of Risk and Reward?

Does it mean reward to risk range between 0.5 to 1? Or more.