With nearly three trillion dollars exchanging hands on a daily basis in the Foreign Exchange Market, thousands upon thousands of people decide to become investors every year. Unfortunately, most new investors have one thing in common – they lose their investment within a few months.

Realistically, only around 10% of all investors profit over the long-term. And while this number is due to a lot of factors, the most common factor shared amongst Forex losers is a lack of sound strategy. Traders focus on strategies that are easy to understand and implement but have no flexibility. This essentially locks traders into a set way of doing things, and when the market fluctuates, they either win big or lose big – the latter being the more popular outcome obviously.

In this article, we will speak about market scalping and how this strategy can work to your advantage and help you profit.

How to Scalp the Market

Whether you realize it or not, all traders are looking to scalp the market. Essentially, you can think of Forex scalping like ticket scalping for a sports game. You are buying at a set price and then reselling for a higher price. The biggest difference is that this tactic is not illegal in Forex.

Here are a few tips to use to effectively scalp for profits in Forex:

1: Practice with a Demo

Before you get started on anything, you need to practice the art of scalping on a demo account. This is going to require at least two weeks of training – the idea being to follow a currency pair to see how it acts, giving you a better feel for the rates.

2: Work up the Moving Averages

Take some time to create a chart using moving averages. Make sure you plot these Weight Moving Averages (WMAs) on your chart: 10, 20, 30, 40, 50, 60, 70, 80, 90, 100, etc, until 240 in intervals of 10. Next, you want to set your price to a line on average or to line on close.

Setting the WMA’s to a different color than the price will create an attractive chart that you can easily follow. You will begin to notice trends in each average.

3: Note all Trends

Pay attention to all trends, looking for resistance in an uptrend and support in a downtrend. Once you spot a good break, you want to move in and scalp part of the move.

Obviously, this is a method that requires a lot of practice. You should run the entire method through a demo account at least three times before you decide to take this strategy into the live marketplace.

As you practice this method, chart creation and following trends will become easier. So by the time you’re ready to invest real money, you will be able to scalp the market effectively and regularly.