Most beginner traders think that the forex market is a quick money-making scheme and simple scalping is the only way to take an instant benefit from the market, but that is not correct.
Scalping is a process used to make money from the short-term price movement of a trading instrument. Scalpers usually wait for a specific market condition to appear and jump into the trade as soon as the market condition favors.
All beginner and expert traders see the same chart, and they probably even use the same strategy, but beginner traders usually lose money from scalping.
Why?
Let me explain the biggest mistake of beginner traders regarding scalping: Scalpers usually take trades on 5-minute or 1-minute charts and look for quick moves of 5-50 pips. But behind the story, professional traders spend a lot of time finding the market direction from a higher timeframe analysis.
For example, before taking a buy trade on EURUSD based on scalping, a good trader should find the price direction from daily to H1 and wait for an active session. Here the active session means the London and New York session when banks and other institutes remain open, which provides liquidity to the market.
On the other hand, if a new trader opens a position on EURUSD by looking at the 5 min chart only at a random time, he has a higher probability of failing.
What should a Beginner trader do?
The core part of scalping is understanding the market structure. If the overall market context based on technical analysis, fundamental analysis or market sentiment shows a buying possibility, only then should traders scalp on the bullish direction; otherwise, skip it and wait for another setup.
Besides, while taking trades, beginner traders should follow a profitable trading strategy. The strategy might be based on technical indicators or price action. But traders should confirm that the strategy has a good track record of providing profitable trades for at least three quarters.
Overall, scalping is the quickest way to earn money from forex, and many professional traders use it. However, beginner traders should do extensive research regarding how to get the price direction and match it with the right scalping strategy to get the maximum benefit.