Not all novice or beginner traders know what forex scalping is. Some people who are dubious about the liquidity of the forex market may look at it as a fraudulent means of market manipulation while forex market defenders attest that it is a legitimate method of arbitration where small price gaps are created through the bid-ask spread and there’s nothing fishy on it. It is also seen as a legitimate trading based on quick response trade oftentimes bring about by order flow.
Who are the forex scalpers?
They are those who are acting as market maker or sometimes also called as market specialist. They are responsible in triggering investors to buy at the bid price or sell at the ask price and in such a way gain the difference created form the bid/ask price. These are mostly the scalping forex brokers who in order not to charge any commission from their services maintain to make money through the difference gain in bid/ask price. They maintain the liquidity of the forex market as well as maintain the flow of order of currency pairs being traded.
How spreads benefits the traders?
Spread can be look at as form of bonuses as well as cost of the trade. Since forex market operates on the bid/ask system, the difference between them is referred as the spread. A trader who waits and queue for the execution is the one who receives the spread as bonuses while those who did not wait or queue for their order and instead pays the market price are the one who pay for the cost of the trade. Scalping strategies depend on the trader’s willing to capture the spread as additional gain or just even the profits. Most of the time, traders rely on their scalping forex brokers to make the successful trade for them. Scalping brokers know where to take the buying and selling control for their clients. And when the price moves to one direction and there’s a bigger imbalance leading to bigger price change, it’s the opportunity they look for and act to obtain the smaller moves gains.
Forex market is one of the best places to put your investment and the best place to gain profits. You don’t get rich with your first trade and may only gain substantial gain however small gains can always lead to bigger gain as long as you have positive outlook at how the market works and on how you should deal with forex brokers.