Forex Scalping

AAA

DEFINITION of 'Forex Scalping'

A trading strategy used by forex traders to buy a currency pair and then to hold it for a short period of time in an attempt to make a profit. A forex scalper looks to make a large number of trades and earn a small profit each time.

INVESTOPEDIA EXPLAINS 'Forex Scalping'

Forex scalping generally involves large amounts of leverage so that a small change in a currency equals a respectable profit. Forex scalping system strategies can be manual or automated. A manual system involves a trader sitting at the computer screen, looking for signals and interpreting whether to buy or sell. In an automated trading system, the trader "teaches" the software what signals to look for and how to interpret them.

It is thought that automated trading takes human psychology out of trading, which is important in forex scalping because the fast-paced environment can be hard for traders to stomach.

RELATED TERMS
  1. Quote Currency

    The second currency quoted in a currency pair in forex. In a ...
  2. Currency Pair

    The quotation and pricing structure of the currencies traded ...
  3. Forex Futures

    An exchange-traded contract to buy or sell a specified amount ...
  4. Daily Cut-Off

    In the forex market, a particular point in time specified by ...
  5. Interbank Market

    The financial system and trading of currencies among banks and ...
  6. Authorized Forex Dealer

    Any type of financial institution that has received authorization ...
Related Articles
  1. Scalping: Small Quick Profits Can Add ...
    Trading Strategies

    Scalping: Small Quick Profits Can Add ...

  2. Top 4 Things Successful Forex Traders ...
    Forex Education

    Top 4 Things Successful Forex Traders ...

  3. Introduction To Trading: Scalpers
    Trading Strategies

    Introduction To Trading: Scalpers

  4. Forex: How To Scalp Fundamentally
    Forex Education

    Forex: How To Scalp Fundamentally

comments powered by Disqus
Hot Definitions
  1. 80-10-10 Mortgage

    A mortgage transaction in which a first and second mortgage are simultaneously originated. The first position lien has an ...
  2. Passive ETF

    One of two types of exchange-traded funds (ETFs) available for investors. Passive ETFs are index funds that track a specific ...
  3. Walras' Law

    An economics law that suggests that the existence of excess supply in one market must be matched by excess demand in another ...
  4. Market Segmentation

    A marketing term referring to the aggregating of prospective buyers into groups (segments) that have common needs and will ...
  5. Effective Annual Interest Rate

    An investment's annual rate of interest when compounding occurs more often than once a year. Calculated as the following: ...
  6. Debit Spread

    Two options with different market prices that an investor trades on the same underlying security. The higher priced option ...
Trading Center