Upping Stake When Scalping ForEx

[ABSTRAX]

I’m currently scalping ForEx… I’m on the MT4 platform trading with Alpari…

Now, after a couple of successful months of turning profit on EUR-GBP and EUR-CHF I’m contemplating upping the stakes… consolidating under 2 currency pairs that I know rather than opening up to markets that I’m less familiar with and thus increasing my risk…

I’ve currently going £2 per pip… the most I’ve been exposed at any one time has been £120 (which swung back around for an £8 loss later in the day), and that was one trade… generally my exposure per trade won’t dip below £10… and then I close out for anything between £8 and £20… there are obviously some trades that don’t go the way planned but generally they’ll get closed out for a loss of £6 or £8…

This method generated about £450 profit last month… with some capital behind me, I’m contemplating doubling up to £4 per pip next month (£900)… £8 per pip the month after (£1800)… basically subsidising my current job until everything is proven enough to be up at a level of lets say £20 per month (£4500)…

Providing I up my balance to cover the same multiple of the largest anomalous exposure I’ve currently had and obviously add some room for manoeuvre above that… again the same multiple of what I currently have now… there shouldn’t be any issue, right?

As I’m still new to this, I’d like to hear your thoughts on this strategy… any success stories doing this? Any failures? And how does it compare to the strategy of diversifying and getting involved in other currency pairs?

 

[ifuel]

I would say it all depends on your account balance, money management and the risk you are willing to take. You can use £2 per pip, with lets say a 10 pip stop loss if you have an account size of something close to at least £2000. Increasing the £ per pip with 100% each month is kind of crazy. You sure have to be a good trader, to keep it up! How long have you been trading, and what is your account size?

 

[wackypete2]

…

This method generated about £450 profit last month… with some capital behind me, I’m contemplating doubling up to £4 per pip next month (£900)… £8 per pip the month after (£1800)… basically subsidising my current job until everything is proven enough to be up at a level of lets say £20 per month (£4500)…

Providing I up my balance to cover the same multiple of the largest anomalous exposure I’ve currently had and obviously add some room for manoeuvre above that… again the same multiple of what I currently have now… there shouldn’t be any issue, right?

First, congrats on some successful trading....
In theory if everything is in the same multiples and proportions there should be no difference, except gross profits
However, consider this: Most people would not feel terribly bad about losing $10 in a $100 mini account, but losing $1000 in a $10,000 account may be gut-wrenching even though the proportions are the same. Don't trade beyone your means, financial or emotional.

Good luck!

Peter

 

[arabianights]

£20 per point is nothing in terms of the liquidity of the market.

However... £450 per pip @ £2pp means you've made 225 pips in an entire month. That is probably indistinguishable from noise, so careful!

 

[finvik]

Forex scalping is in high demand nowadays. Many forex brokers frown upon scalpers, but not us. We are always looking for talented scalpers.True scalping involves opening and closing a position in seconds or minutes at most. Even though scalping involves the use of leverage and higher leverage means higher risk, the short period of time a forex scalper is in a trade decreases the exposure risk that's inherent in trading or investing due to the holding of a position. If done correctly, scalping provides this additional degree of "risk control" that is not even present in day trading.
Scalpers use all sorts of platforms to scalp currencies, but probably one of the most common is MetaTrader 4 (a.k.a., MT4). MT4 is made by a Russian company and has become sort of the "de facto standard" among many forex day traders. The problem in using MT4 for scalping has nothing to do with the platform itself, but with the unscrupulous brokers that license the software and offer it to their clients (see the explanation earlier on brokers that trade against their customers).
For MT4 to be used in scalping the forex market without any limitations or restrictions, an ECN-type feed must be used or a multi-liquidity provider feed such as Currenex or HotSpotFxi. Currently, there are a few firms that are working on such a project to be able to accommodate extreme forex day trading or scalping.

 

[SvenFoster]

Focus on the downside and not the possible upside. If you can quantify your risk and drawdown then that will tell you what you need to know about position size.

You say that your exposure went to 120 for a bit and swung back but that is as good as a loss of 120. if you were leveraged up then the swing would also be leveraged up.

think risk.
jmho