What is scalping and how to do that?

Most of the new traders ask this question that what is scalping and how to do that? actually in my view, it is a way to make money as much quick as possible. In simple words, you trade according to flow of the market and execute the trades frequently, you open trades and close trades within shortest possible time, where the trade is in  profits. 

The scalping can range between 10 pips to 15 pips, some traders do this with only 3 to 4 pips, if it is fixed spread, and if it is not fixed spread, then most of the traders close their trades with only 1 to 2 pips profit. This is the shortest way to make money with the help of scalping. 

SCALPING STRATEGY

In this trading method, what traders do? and what are the circumstances that are good for scalping? Whether it is session changing time or market relaxation time, if the market is fluctuating approx 10 pips then traders may play their game in market easily, only, if they are scalper. The traders who do scalping are normally called as scalper in forex market. 

This is a trading strategy, that most of the new traders do, because they are eager to earn money and they don't know that this is not suitable for those who do not know about market movement and expected movement, and if they do it blindly then it may wash the account within five minutes, it happens with almost 80% of new traders, because they do not know about hedge strategy and that's why they lose their whole amount, some traders earn a handsome amount, while they don't even know about trades execution, that is purely based upon luck, and then trader think that he is king of market and start following this strategy again, but in second time he lose. So, it is my suggestion, whatever you do in forex market, please do some analysis first and then start trading.

Only a few forex brokers allow scalping method in trading, while so many brokers do not accept this kind of trading, because it hurts their interest. But some brokers allow scalping, so whenever you are going to signup for a forex broker, then you shall know whether he allows scalping or not. If not, then search a good forex broker to allow you this trading strategy.

What is meta trader? How to use it?

What is meta trader? this is an electronic platform that is used to execute your orders in online market, this is a software that directly connected with your broker and then you insert your order and it place in market on behalf of you. 

There are several software in market that brokers are giving free of cost. I am talking about international brokers, not local brokers, because some local brokers in your country may charge you some amount of money for the meta trader they have, some brokers are still offering the old version of meta traders.

Meta trader 4

What I know about meta traders, I have found that meta trader 4 is the best. Although meta trader 5 is available in market and with some brokers, but mostly traders prefer meta trader 4, what is the difference? there are only a few differences between these two meta traders. Most of the differences related to order execution. 

You will see some difference in meta trader 5, that the tabs which you can see below the meta trader will be a bit different from meta trader 4, the order execution will also be different, but one main thing that you can not do in meta trader 5 is, Hedge, this is a thing that you can do in metatrader 4, but not in metatrader 5. This is one kind of trading technique, that will be used in your trading session, when your account is in critical condition. But if you are using metatrader 5, then I am sorry to say, that you will need to replenish the account with big amount to secure the remaining amount, otherwise you will lose your whole account. Below is a picture of metatrader 5.

Meta Trader 5

What is Spread in forex market?

This is a question that most of the beginners ask, the answer is here. Spread is actually a difference between the buying and selling price. When you are going to buy the Eur/Usd currency pair, then the buy price will be different from selling price, that difference is actually spread. 

Some brokers offer fixed spread and most of the brokers offer floating spreads. If the spread is fixed then it is good, because it will not change while market fluctuates, but if the spread is floating then it will be very much difficult for some kind of traders who think that they will earn with small accounts, their accounts may wipe out. 

Spread between buying and selling price is 0.9 pips

Floating spread starts from 0 pips, but sometimes it widen up to 70 pips, that is enough to wipe out a small account, if there is a trade opened in an account and market fluctuate or any kind of rumor hover in market. Just like some times ago, it happened with Usd/Chf pair, at that time market fall terribly bad and it caused bankruptcy for so many institutions. So, if institutions may bankrupt then small traders will not sustain in market. You are thinking that if the market fall, then what is the matter of spread in this? Ok, let me explain you. When the rumor hover about swiss franc at that time, then suddenly the traders saw wide spread in their meta trader, and most of the brokers stopped trading in this pair, this is practice of market that when they see that there might be a sudden fluctuation in market, then they stop trading that currency pair, as I saw this thing in Russian Ruble, Swiss Franc and Britain Pound cases.

So, whenever you choose the forex broker, then you need to see that what kind of spread they are offering, what is spread, if fixed or floating? What meta trader they are using? I hope you will understand these terms when you get familiar with market.

What is pip? What is its use in forex market?

Pips stands for "Point in Percentage". The point that indicate that you are in profits or you are in loss. These are points between buying and selling prices, usually we see that there is three points difference between buying and selling price. Even if you are changing your currency from any local exchanger then you will see that he will deduct the difference of conversion, that difference in points are called "PIPS".

When you are opening a mini lot, that is $0.01 lot, it is (10k units of currency) you are going to buy, against counter currency. Now, when the market goes in your favor, it will move into points, then you will earn or lose money, depends upon the market movement, but it doesn't means that market will continuously move against your trade, it may return back after a few minutes, few hours or after whole day.

Who are Forex Brokers

This is a question that most of the new comer in forex market ask, there are so many common questions like, who are forex brokers? how can we trade in forex market? what is the purpose of forex broker, if we are doing direct deal etc. So, let me tell you something about forex brokers. Who are they are why they are necessary for retail traders?

Well, if you have decided to enter in this lucrative market and want to make some bucks with this market that may be an extra income that you may earn in your spare time, but that is far now, this is beginner guide. What forex broker are? Actually forex brokers are those companies and institutions that are active in market and those who have a lot of money to invest in market. The trading in market is not easy, if you are not trading with broker. Because you invest only a few bucks but the broker invest the rest of money in the market on your behalf, that is called leverage, he gives you leverage and you then trade in market to earn money.

Types of forex brokers

Without broker if you are going to trade then you will have to invest at least one hundred thousand dollars for the sake of 1$ lot trading, because market runs with lots, and if you buy 1$ then it means that you are buying one hundred thousand dollars. The broker invest his own money and this is the rule of market. In return what he gets from you? He earns through delay, swaps, spreads and account maintenance etc.

There are two type of forex brokers I know in forex market, one is direct dealing desk broker and other is non dealing desk brokers. The difference between in these two brokers, if I tell you in simple words, then one give lives market rates each second and other gives market rates that may differ from original market rates.

As you can see in this picture, that No dealing desk has STP and ECN Plus STP, and Dealing desk are market makers.