Every trader have different strategy when trading. So, what do you prefer to use, Hedging or Scalping? And why do you use it? Let's share here.
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Hedging or Scalping?
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Scalping for me all the way. I trade in a very short time frame with a couple of positions open simultaneously. It feels more hands on, and I like the thrill of it. I'm just glad my broker, profiforex, offers a 0.7 spread on the USD/EUR pair. I've never actually tried hedging, I hope someone who does could share his/her experience.
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Why would hedging(same pair) be an alternative to scalping in the first place?
Hedging comes into play when you don't know what to do with your open position...it might even be a scalp trade that went wrong direction.
But if you mean to hedge i.e. a long eurusd with a long usdchf, that's what I'm doing from time to time (also eurjpy and chfjpy in opposite direction)
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Originally posted by dudeE View PostScalping for me all the way. I trade in a very short time frame with a couple of positions open simultaneously. It feels more hands on, and I like the thrill of it. I'm just glad my broker, profiforex, offers a 0.7 spread on the USD/EUR pair. I've never actually tried hedging, I hope someone who does could share his/her experience.
Originally posted by iwjw View PostWhy would hedging(same pair) be an alternative to scalping in the first place?
Hedging comes into play when you don't know what to do with your open position...it might even be a scalp trade that went wrong direction.
But if you mean to hedge i.e. a long eurusd with a long usdchf, that's what I'm doing from time to time (also eurjpy and chfjpy in opposite direction)
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Originally posted by Gaban View PostEvery trader have different strategy when trading. So, what do you prefer to use, Hedging or Scalping? And why do you use it? Let's share here.
Why are you considering hedging as a possible strategy? Hedging is often done by businesses and big institutions to protect themselves against adverse price movements. It is more a 'defensive' measure to protect against losses.
Scalping is a viable trading method but you must be aware that it requires you to be looking at the charts for prolonged periods of time as it involves trading on very short timeframes. Trading opportunities present themselves on very short notice.
If that is not your cup of tea, perhaps you might want to consider trading on higher timeframes such as H1, H4 or Daily. Trading on hese timeframes does not require you to look at the charts often. For example, trading on Daily charts requires you to look at the charts maybe twice a day - once in the morning and once at night to manage the trade.
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I believe scalping involves a lot of trades in a day, trying to get small profits from each trade by taking advantage of the bid/ask spread.
One benefit that scalping has is the risk is much lower than traditional trading methods.
You can also lose all hard earned profits in a single trade. So we need to be careful when dealing with scalping because there is NO PERFECT STRATEGY.
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Originally posted by tonnymak View PostI believe scalping involves a lot of trades in a day, trying to get small profits from each trade by taking advantage of the bid/ask spread.
One benefit that scalping has is the risk is much lower than traditional trading methods.
You can also lose all hard earned profits in a single trade. So we need to be careful when dealing with scalping because there is NO PERFECT STRATEGY.Last edited by apple1937; 26-04-13, 15:21.
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Originally posted by Gaban View PostEvery trader have different strategy when trading. So, what do you prefer to use, Hedging or Scalping? And why do you use it? Let's share here.
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Originally posted by tonnymak View PostI believe scalping involves a lot of trades in a day, trying to get small profits from each trade by taking advantage of the bid/ask spread.
One benefit that scalping has is the risk is much lower than traditional trading methods.
You can also lose all hard earned profits in a single trade. So we need to be careful when dealing with scalping because there is NO PERFECT STRATEGY.
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The term scalping may conjure up images of someone removing the enemy's hair as a trophy, or the guy standing outside a sold out concert selling tickets for an inflated profit.
Forex scalping is almost as scary, but definitely comes with a huge adrenaline rush - and possibly, quick profit.
Forex scalpers need to increase their per pip dollar value to extract similar profit from more conservative transactions where the cost per pip was lower, and the risk was lower. In other words, the risk to reward ratio is potentially heavier toward the risks. However, Traders who are primarily scalpers may disagree with this statement.
Scalpers user tight stop loss limits as a strategy to minimize loss should the trade go negatively. Tight stops means little play for a market that moves in an up down motion toward a target. Scalpers therefore may be stopped out of many trades that were going in the direction they anticipated, racking up large losses.
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I think hedging is not good approach to manage your risk. Traders usually do that if positions has moved against them and they hedge it. It`s like locking the loss.
Scalping is what I do. My EA gives me signals and then I will decide by watching the price action what to do.
For scalping you have to choose a broker whose trading costs are low.
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