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Saturday, 30 June 2012

Forex Scalping Brokers

8 Aspects to Check Before You Use a Scalping Strategy

Scalping is a game of capturing the market indications and earning profits in a smaller duration of time. Scalping is a game of seconds so the best broker for scalping is one who must have up to date knowledge and skills so that he can trade in seconds. Normally the brokers are the representatives of traders in the market so you must choose a broker who can easily fulfill your scalping needs and can earn a decent profit for you.

There are hundreds of brokers operating in the retail forex market today; naturally, each has a technical capability, and business model suitable to a different trader profile. But each broker is not fit for scalping. Here we are sharing some features of brokers who are good for scalping with you.

1. Spread must be low:

Most brokers charged their fees on the basis of spread. So spread is an important variable in deciding a broker for scalping. A normal trader mostly opens one or two orders in a day but a scalper opens tens of orders in a short period of time. So spread can affect his balance sheet position. In short we must ensure that the broker we choose for scalping must have low spread.

2. Currency pair offered:

Scalping is the name of earning profit in small chunks of time. Choose a currency pair which you can easily buy or sell. So the currency pair that broker offer should have two characteristics that are volatility and liquidity.

3. High leverage:

Leverage means the return and the risk you are ready to take. The scalper wants to make quick profits. So a good broker for scalping also offers high leverage to the traders so that they can earn a reasonable profit on every trade.

4. Fast execution of orders:

Forex market is a world market so it can change in 0.1 second. Time is most important in scalping. So choose a broker who has fast execution of orders so that he can trade more orders in just one second. In scalping small moment are important so a broker should be such who can judge that moment and also has an ability to execute your order in seconds.

5. The Risk to Reward Ratio:

It is quiet common for scalping systems to risk a lot for a little profit because it is the game of seconds or minutes. So you must choose such broker for which this ratio is favorable.

6. Strong analysis tools:

Market is totally unpredictable in scalping. Scalping involves technical trading because the time period is short in scalping so mostly the market does not follow the fundamental principles. So a broker must possess some strong analysis tools so that he can easily understand the market. A good analysis tool must possess the characteristics of judgment so that when a short moment occurs in market the system can judge it easily.

7. Low commission:

A good broker for scalping is one who charges a reasonable commission for every trade because in scalping the aim of the trader is to earn a low profit but in greater number of times. So the commission should be such that it is always less that profit.

8. Must have strong software support:

Scalping is one of the most popular strategies, and it involves selling almost immediately after a trade becomes profitable. So it is very difficult for brokers to sit all the day in front of the trading screen and wait for a favorable moment. A good broker for scalping is one who uses computer software. So when such moment occurs in market the computer automatically makes the trade.

# Conclusion

Scalping is a game of capturing the market indications and earns profits in smaller duration of time. Low spread and high leverage are the most important features of a good broker for scalping. A good broker for scalping is one who concentrates on the market behaviors and tries to execute the orders fast.

Check the top recommended ECN broker for scalping at www.fxbuild.com.
Good luck!

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