MONEY MANAGEMENT FOR SCALPING????

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MONEY MANAGEMENT FOR SCALPING????

Postby Grant » Tue Apr 06, 2010 5:02 pm

I have a good question that has been bugging me for some time. I am familiar with risk/reward and money mgmt for longer timeframes but where does it go for scalping? I see risks between 1 and 4% per trade in most guidelines but this is longer term trading.

Firstly, I use Walter’s VMA scalping system as linked here: http://forex-strategies-revealed.com/sc ... end-trades

I subscribe to his theory of 10 pts per day as I have long ago found out that the smaller trades have a much higher probability. And that 10 pts doesn't mean in one trade either.

Let me give some numbers. Firstly I get about 75% hit rate, R:R of 1:1 with a 5 pt SL and PT. I set my daily risk to 3% and weekly to 10%.

Here is the problem. If I get 75% hit rate, then 4 trades gives me my 10 pts. (3 wins 1 loss, SL and PT of 5 pts, so it’s 10 pts.). It means that I am making 2% per day. This is on high probability trades, not flyers. Non-compounded, this means 40% per month. If I compound daily or even weekly, it looks more like 50%. I am no Market Wizard, (maybe for the next edition) so I think that appears a little too much.

What it means to me is that for an account of $5000 I can take home $2000 + per month. I do this in about an hour per morning.

The difference between scalping and position or swing trading is that time is compressed. I get higher probability with a smaller RR ratio but more trades per week. Using the same risk of 1%, I have to use much smaller lots for long term trading due to the larger SL needed.

I guess what I want to know, I think it was Alex that was the scalping expert, but I am asking anyone, is this in line? And I am referring to the risk. It may seem to be too good to be true but I want to know from a real scalper what they are doing.

All comments welcome.

Grant
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Re: MONEY MANAGEMENT FOR SCALPING????

Postby Moreno » Sat Dec 20, 2014 10:23 pm

Scalping is a trading strategy where we open and close trades quickly, as we do the scalping then we can make a profit. but because it is difficult to predict the forex risk well then we need to have good money management, do not trading full lot when scalping if you do not have enough experience
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Re: MONEY MANAGEMENT FOR SCALPING????

Postby kaha » Fri Jan 02, 2015 2:35 am

scalping is good always check with your broker what is their definition of scalping some brokers will allow to scalp but end up in a tight spot accusing or arbitrage. be cautious
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Re: MONEY MANAGEMENT FOR SCALPING????

Postby nanypurwanti » Wed Jan 14, 2015 11:08 am

Trade using scalping strategy is more better if we trade directly to interbank. This chance only on STP account in MAYZUS broker. This STP account make you possible to Direct Trade to Interbank. All your orders and execution will executed fastest and no delay there. Its very suitable for scalping.
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Re: MONEY MANAGEMENT FOR SCALPING????

Postby Moreno » Thu Jan 15, 2015 11:06 am

money management is very necessary in forex trading. with have money management so we will to trade with maximal and our account will be survive in forex. we can train trading MM with trading using small capital. or we can also utilize of demo account to train trade MM well
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Re: MONEY MANAGEMENT FOR SCALPING????

Postby Moreno » Wed Jan 21, 2015 10:46 am

money management is very important for traders especially when we want to scalping. we need to manage our money properly so that maximum benefit can we get and risks can be minimized with good happens. we should be able to set how many lots will we trading so margin our account still awake
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