Forex Trading: How To Profit From Very Small Moves

Trading in the Forex market can be extremely profitable if you know how to navigate the market. One of the methods that many traders use is a scalping approach to trading. This type of strategy involves trying to profit from very small movements in the Forex market -- it comes with a fair amount of risk, but it can also be very profitable. Trading with this strategy will require you to place many trades and bring in small, regular profits.

Find a broker that offers a high

amount of leverage for an account of the size that you plan on opening. To profit from small fluctuations in the Forex market, you have to use a large amount of leverage. For example, some brokers offer leverage as high as 500:1. This will give you the greatest profits when the market moves only a small amount in your favor. You could work with a broker that offers 200:1, 100:1 or 50:1 leverage and potentially still be profitable with this type of trading strategy.

Find a broker that allows scalping as a trading strategy on their platform. Some brokers do not allow you to open and close a trade within a short period of time. You might have to leave your trades open for at least five minutes or longer. If you plan on being profitable with scalping, you need to find a broker that has no restrictions on trading time limits. This way, you can open a trade and close it out at any time that the Forex market moves in your favor.

Choose currency pairs that tend to range back and forth frequently. Some currency pairs are better than others when it comes to scalping strategies. You do not want to choose a currency pair that trends frequently.

Trade during the best times for scalping for your particular currency pair. For example, you might want to trade when volume in the market is low and not much movement is taking place. At the end of the United States trading session is a popular time to scalp, as there is not a lot of traders in the market for a few hours.

Analyze the market and place a trade in the direction that you believe the price will go. If you think the market will move up in the short term, place a "buy" trade. If you think the market will go down in the near future, place a "sell" trade. Set take profit and stop-loss levels on your trade. Once the market moves to that threshold, your trade will close out. You can also avoid setting a take profit level and simply close out the trade manually when the market has provided you with enough profit.