What is Forex Scalping in General
Forex Scalping is a trading technique that takes advantage of tiny short-term price changes in currency pairs trading. Forex scalping is based in high capital leverage which may leverage funds up to 1:1000. Scalpers are executing tens or even hundreds of Forex trades in a daily base and usually they keep their position for less than 1 minute of time.
What are Scalpers
Forex Scalpers are traders who open and close positions in short-term by taking advantage of tiny upwards movements and actually making a profit by using high leverage. Scalpers target trading profits from 1 to 10 pips. Low spreads and high leverage are absolutely required. Usually scalpers are after low-spread trading offered by ECN or STP Forex Brokers.
Scalpers are using always Stop-Loss order to limit their loss potential to desirable levels. A successful trader that scalps must have a high winning-to-loose ratio over time.
Forex Brokers Allowing Scalping and Providing a Free VPS Hosting
Scalping is suitable only for Forex Professional Traders and as a practice it is usually forbidden by Forex brokers in their policy. Here are some Forex Brokers that Allow Scalping and that offer a free VPS Hosting service (VPS means automated trading without your PC turned on):
What is Forex Scalping
ECN Forex Trading in General
ECN means Electronic Communication Network and it is a common way of trading the global Forex Market. Actually ECN trading create an electronic bridge between Tier-1 liquidity providers (for example Banks) and smaller market participants (for example retail Forex Traders). This bridge is created through an ECN Forex Broker who charges trading commissions for offering his services.
Characteristics of ECN Forex Trading:
1. Variability of Spreads and the Lowest Spreads
2. Full Market Depth and High Liquidity
3. Instant order execution (no delays)
4. Automated Forex Trading (API Trading)
5. Anonymous Trading
ECN Forex Brokers
Some traders see ECN trading as the best way to trade Forex, others prefer to trade the market using STP Forex Brokers or Market Makers.
Advantages of ECN Trading
ECN is system designed to avoid the role of a middleman when executing a Forex order. That means that traders who have access to ECN trading are able participate directly in the Forex market. The theoritical advantage of ECN trading is that traders are not executing orders against their brokers as in the case of Market Makers Brokers. ECN brokers are offering high liquidity, fast execution and narrow trading spreads and that is why they are preferred from professional traders. Because of the narrow spreads and the high execution speed, ECN brokers are the best choice for day-traders and especially scalpers.