Personally, I prefer scalping from the inception of my trdaing career. I am comfortable with it but some traders were saying scalping is risky. Is it so?
Is scalping risky?
- Thread starter John Keplar_
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Because of its focus on brief timeframes, it requires rapid decision-making, which can be prone to errors. Moreover, the high frequency of trades increases transaction costs, which can erode profits. Scalpers are also vulnerable to sudden market volatility, making it easy to incur significant losses quickly. As such, while scalping can be profitable, it's also considered riskier than some other trading approaches.
Risk is basically the size of stop loss. In liquid markets such as Forex your risk is limited is what you set by our stop loss. So calling scalping risky style of trading is a misleading statement. There is also little evidence or some logical reason to believe that trading on shorter-timeframes or capturing small price movements affects the likelihood of winning.
Yes, it is, but you can use risk-management tools; they have built them for you!
The concept of the scalp is risky and requires great control over your emotions, but you can master it using risk management tools.
The concept of the scalp is risky and requires great control over your emotions, but you can master it using risk management tools.
So can you advice something that is more advanced than setting stop-loss and take profit?
There is only one reason for saying that, when scalping, there is a high chance that you will start over-trading, and that is a red line to cross! otherwise, if you are controlled over yourself and you can stick to your risk management and capital management, scalping is a trading style just like every other trading style.
I think due to short-term nature and high-frequency trading, it carries a significant risk, especially in volatile markets. Depends on you, if you have swift decision-making and disciplined strategy you can succeed.
Scalping can be a profitable trading strategy, but it requires skill, discipline, and an understanding of the risks involved. It's generally for experienced traders who can make quick decisions, and manage stress.
I would say it's only for the more experienced ones out there; you need to be very quick with your decisions and know all about those little gaps and price changes.
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