Scalping

Tools for currency market analysis

The concepts of the Wild West lead us to consider the most fascinating things, namely, scalping and pipsing. Whether they are different things or the same thing - there is a lot of information on the Internet, which varies in meaning. Let's try to find out together.

Other articles under the heading "Exchange discussions"

• The World Crisis: Pros and Cons
• Forecasts: stock bulls vs. bears
• Forex: Man vs. robot

Scalping and Pipsing

Let's begin. It is believed that the concept of scalping (to take a scalp) originally appeared, and later the concept of piping appeared. The name "piping" was used to refer to such actions as "grabbing pips" or "catching pips".

Pipsing is understood as a narrower part of scalping. Scalping is a method of trading used in different types of markets, not only in the market. It is used to make short-term transactionsThe trades last up to 15 minutes, up to 5 minutes, and even up to 1 minute, trading on tick charts. Just trading on tick charts, transactions not exceeding 1 minute, maximum 5 minutes are considered to be pipsing or pipsing.

Almost all -scalper strategies include negative expectationThe profit is a few points, and stop-loss may be 20 points or more, or it may not be there at all.

In addition, there is an opinion that scalpers are the most successful traders on the market . But first things first.

Advantages and disadvantages of scalping

If we remember Jesse Livermore and his book "Memories of a Stock Speculator," it describes exactly what he did in the gambling houses. It could be called scalping at that time, trading with the help of a stock tape. Namely, Mr. Livermore was looking at the tape, analyzing, evaluating stocks, and, based on their undervaluation or overvaluation, trying to make short-term speculations in short periods of time with these securities. Of course, with the advent of Internet technology in trading, with the advent of trading robots, we have made great strides in this direction.

If we draw intermediate conclusions, then scalping and pipsing can be characterized by the following criteria How:

1. Short timeframe (15 minutes and below);
2. Used by volatile instrument;
3. Tough nerves;
4. Short feet.

At the same time, these types of trade have clear advantages before the classic "buy-and-hold" options:

1. Great profit potential, plus the ability to quickly "ramp up" the deposit (low start);
2. Uncomplicated strategies (almost no need to predict the market);
3. Independence from the phase of the market;
4. Free choice of time.

But also. Shortcomings scalping and pipsing also have their place:

1. A great deal of psychological stress;
2. Risks. The capital management methodology, rather than the trading strategy itself, is of paramount importance;
3. The need to constantly monitor the market;
4. Work without "stops" and "profits;
5. Spreads "eat up" profits;
6. Additional restrictions from brokers, for example, in addition to the spread or instead of the spread there is an additional commission.

In this article, we will try to describe this phenomenon in more detail and dive a little deeper by examining the types of scalping.

Types of scalping on

So, what are the following types of scalping?

1. Intuitive;
2. Indicator;
3. Arbitration;
4. "The Leaders;
5. Graphic;
6. Application glass.

Intuitive, indicator, graphical types of scalping are somehow clear. Intuitive scalping. Almost everyone who first comes to , open a demo account or the first real account - trade using this type of scalping.

Indicator or technical scalping is based on indicators and advisors. It is not worth considering in detail.

"Guides." - it's high correlated Roughly speaking, when gold goes up, silver follows. There are quite a few scalping strategies based on this technique.

Arbitrage strategies assume virtually no risk, low yield, for example, 20-30% per annum.

Trading by schedule as a type of scalping also deserves special attention. This type of scalping pays off, because it allows you to build really effective strategies.

In stock trading, all known traders trade using the "cup". These people do not look at any indicators or charts. Most exchange traders are guided precisely by "application glass.".

Why shouldn't you be guided by the application glass that companies provide?

A market is an interbank currency exchange market in which there is no central counterparty. What is a central counterparty - is an exchange where all orders from all brokers are brought together in one center, where clearing and mutual registration of orders takes place. There is no single center, there are different liquidity providers, ECN-networks, which provide orders slabs (Market Depth and Level II), but this slab of orders applies only to this broker, to this liquidity provider or ECN-network.

In conclusion, I would like to say that there is a glass on it, indicators measure the speed and time of tick movement, advisors can generate a huge number of trades per day. In this regard, one of the conclusions of this article is that the practice of scalping is transforming. The other conclusions are up to you. Successful trading and profits!

Other articles under the heading "Exchange discussions"

• The World Crisis: Pros and Cons
• Forecasts: stock bulls vs. bears
• Forex: Man vs. robot