Sunday, January 24, 2010

Scalping can be dangerous

Being a scalper one's worst enemy is habit, long term traders, and fundamental traders. Repetitive patterns can develop bad habits when you scalp the market, getting carried away by the perception the market will move repetitively at the same fluctuation level that can easily make you lost control of the real market direction. This is the natural habit of human being that must be put in control when you scalp the market.

Secondly the long-term traders can make any surprise move at any moment regardless of indicators position and direction when it reaches certain significant support and resistant level in the weekly or daily time frame. The volume of movement sometimes is so great that can wipe out any scalpers profits in a matter of minutes. This is because the long-term traders simply do not care much of using any indicators, and they setup their trade position as long as they think the market has reach the support and resistant level or (overbought oversold).

Thirdly the fundamental factors which is the instrument of the news traders. News happen anytime, even sometimes they are not listed into the economic calender. The news of war, natural disaster, or even minor economic news can affect the market movement significantly. As a result scalper often losing more because of the news as it happens out of sight and surprise.

So basically become a scalper can be a big disadvantage in forex trading especially when you trade the most turbulence market with the like of GBP-JPY, USD-JPY, EUR-JPY, CHF-JPY. 99% of your chances guarantee losing all your deposit in your trading account.

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