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American Home Business Network: Learning Forex Scalping

Saturday, May 16, 2009

Learning Forex Scalping

By Hass67

Basically you can trade forex as a short term trader or a long term trader. In short term your time horizon will only be one day, most of the time you will trade intraday; opening and closing position within one day. In long term, you will open a trade for 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 takes advantage of the fact that most of the time the market is ranging. Ranging means there is no significant price movements or volatility. The aim of a scalper is 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.

If you are interested in scalping then you need to make more pips per trade than the pips spread offered by your broker. The spread is your cost of trading. So if the spread is 4 pips. You need to make more than 4 pips for each trade just in order to break even.

You cannot become a successful scalper without understanding technical analysis well. You should have clear concept of over-under brought, support and resistance levels, trendlines, trading channels etc before trading any position.

Most of the forex brokers hate scalpers. Since the brokers are most of the time trading against you, a successful scalper can take profits away from the brokers. No doubt many brokers try to ban scalper from trading.

Since scalping means a few pips per trade, in order to make 20-50 pips per day, you will have to trade many times. Dont forget these 20-50 pips are after you have subtracted the trading cost.

Since scalping involves making a few pips per trade, you will have to use high leverage in order for those pips to make a decent profit for you. What about leverage?

Leverage is dangerous. It is a double edged sword that cuts both ways. Leverage helps you if market favors you but it will destroy you if the market does not favor you. So beware of using too much leverage while trading.

About the Author:


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Feature Article: Make the Leap to Home Based Business Success

Feature Article: Make the Leap to Home Based Business Success
Copyright © Stone Evans, The Home Biz Guy
http://www.PlugInProfitSite.com/main-21753

Before you can have a successful home based business, you must first possess 3 "intangibles." These are things that must come from WITHIN you.

 ===> Intangible 1 <===

First, you must have a strong WHY.

Why MUST you have a successful home business? What is driving you? What is it that you CAN'T have in your life anymore and/or what is it that you absolutely MUST HAVE now?

For me, I couldn't stand working 12+ hours a day anymore and missing the experience of my children growing up. I also absolutely HAD TO HAVE the freedom of being able to control my life and finances through a little box (laptop computer) that I could carry with me anywhere in the world and not be tied to anyone's time pressures or demands but my own. That was my carrot and my stick. I felt a great pain deep in my gut of missing out on my children's lives and the incredible freedom that succeeding in a home based business would provide for me. I found my why. You MUST find yours.

===> Intangible 2 <===

You must BELIEVE that it is possible.

If you don't believe that it's POSSIBLE for you to have a successful home based business or make your living from home, you won't. It's that simple.

For me, figuring out that it was possible was just a matter of realizing that many other people were ALREADY making great money working from home. If they could do it, I could too. It would just be a matter of figuring out what those people were doing and then adapting it to my situation.

There is no shortage of undeniable PROOF that people (millions of them) are making money working from home. Just get online and do some research and you'll find countless testimonials and stories of REAL PEOPLE making real money on the Internet. Or head to your local bookstore and you'll find the same documented evidence of this fact. Truth is, it's getting easier and easier to make money with your own home based business.

I've always said that "affiliate marketing" (a simple way to make money from home) is the job of the future. In the "old" days, you had to go to a potential employer, apply for the position and hope for the best. Now you can simply go to any company you want, fill out their affiliate application and start work immediately. Affiliates are the new working class. In fact, making money with affiliate programs or making your living on the Internet is WAY MORE than possible. It is pretty much (or will be soon enough) unavoidable now. Affiliate marketing is the "job" of the future that's already here TODAY.

===> Intangible 3 <===

You must be willing to MAKE THE LEAP.

Ready, FIRE, then aim... This is the operating philosophy you MUST adopt to succeed with a home based business.

That's backwards for most people who like to aim before they fire. The fact is that home based business success is a moving target... The only thing constant about it is change. You need to stop analyzing the game and simply jump into it. You can't learn from the outside... You have to be IN THE RING to truly understand it.

The lesson here is that you will never really be READY to start a home based business. You simply have to start one. It's like having children... You're never really ready, but when it happens you adapt and grow. This is what I call "Making the Leap."

The good news is that the cost of failure with having your own home based business is very small. In the "brick and mortar" world you need to evaluate things very carefully before you decide to open up a business. It's almost always necessary to invest thousands of dollars to get an offline business off the ground. However, on the Internet you can often start a successful business for less than $100. The Plug-In Profit Site is a great example of this: http://www.PlugInProfitSite.com/main-21753

You simply need to get IN THE GAME... Each moment that you stay "out there," you're wasting valuable time that you could be learning and skills necessary to build a successful home based business. In fact, if you're not in the game yet, you're ALREADY behind the times. Make the leap to creating a successful home based business today!

About the Author:

Stone Evans, The Home Biz Guy has helped thousands of people in over 200 countries around the world start and run a successful home business. Discover 3 easy steps to start your own home business and subscribe to The Home Biz Guy's FREE Home Business Secrets Mini-Course at: http://www.PlugInProfitSite.com/main-21753



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