Get these Forex Scalping Cheatsheets and discover the Forex Pips Gizmo from Rahul. Download this award winning Forex Trading System that made 1,306.20% PM. Get these 3 Swing Trading Systems FREE. Rahul Gupta: Over last few weeks, I received few questions/comments from a lot of subscribers asking me where are they making mistake since most of their trades are ending in loss! When I did some analysis, I found 1 common mistake most of the traders make. And this is a mistake which is committed at the fundamentals and so a trader making this error can never have profitable trades.Here it is –
“The biggest mistake is to adapt your trading style as per trading strategy”
Yes! By this what I mean is that most of the times the traders come across a trading system and then make changes in their trading behavior to use that system. For example, if a trader who trades on 4 hr charts, who has only few hrs a day to trade, gets access to a day trading system, his/her whole trading routine will undergo deep changes if he uses this day trading system. S/he’ll have to have quick reflexes, monitor charts at more frequency, be ready to close the trades at lower profit targets. Each trading style is very different from one another!! When I look at forex market, there are 3 prominent trading style that emerge –
1. Swing Trading – Trading on higher timeframes like 1 hr or higher
2. Day Trading – Trading on a 15 min or 30 min or even 5 min chart!
3. Scalping – A variation of Day trading which focuses on quick profits one after another
So as you can see all these trading styles are very different! So, you need to 1st understand what kind of trader are you and once you figure that out, then select an appropriate trading strategy! Let me know your comments on this post. Forex Scalping is one of the very lucrative forms of trading! It is primarily because in scalping you can –
1. have very quick profits..sometimes just in a matter of 2 minutes.
2. Multiple opportunities each day
3. Trade any currency on any timeframe
Needless to say, huge population of Traders is into scalping. Yet, only handful of traders end up making pips by scalping. Rest of the folks, struggle even though Scalping is fairly straightforward to do.
Because of 2 serious mistakes that are made by them.
But to be fair to them, it is not their fault! (I’ll tell you in a minute why did I say so)
But 1st, let us look at these mistakes –
1. Poor Trade Management guidelines – Most of the traders carry the misconception that in trading you need to risk 5-10 times of what your profit target is.
So, they’ll target to make 10-15 pips per trade by risking 50, 75 pips or even 100 pips per trade.
SUCH FOREX SCALPING STRATEGY CAN NEVER BE SUCCESSFULL!!
But to be fair, this is not a fault of traders. This mistake is because that is what is told to the traders by all these faulty scalping systems out there!! Per my opinion, in scalping, you should NEVER RISK more than what you intend to earn from that trade!
2. Incorrect Entry and Exit guidelines – In Scalping, you should never have any ambiguous guidelines for entering and exiting the trade! You need to be quick and you need to enter the trade as soon as the conditions are ideal. The same goes for exiting the trade also.
So naturally, the entry and exit criteria need to be precise to a pip to have high number of profitable trades.
That is where most of the other forex scalping system fail. They target to have 5 pips profit per trade by putting 100 pip stop loss. Because when you use such criteria, you can have fuzzy entry and exit guidelines! So, needless to say, Scalping is very lucrative but requires strong trading guidelines. Like it should have –
1. Precise entry and exit criteria
2. Strong money management principles
3. and can allow traders to make full time income by scalping.
I know of one such precise scalping system. Incase you are interested to find out, just let me know!