The foreign exchange market is versatile and varied in many different ways. Scalp Strategy, One of the ways in which forex manifests its versatility is through the different trading strategies that can be applied to this market. As such you can use strategies that are high risk, low risk, with high frequency, or with low frequency and a large time window.
One of the strategies that works particularly well with the Forex market, and we will see why, is the scalping strategy. As it happens, the automated trading tool XauBot Pro has fully integrated this trading strategy with the best features and parameters that relate to it.
In this article, we are going to present you with a guide to use the scalp strategy of XauBot Pro and we will also take a look at some of the advantages of this trading approach.
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Step by Step Guide on Using Scalp Strategy with XauBot Pro
In order to start using the scalp strategy with XauBot Pro, the first step is to set this strategy as the main strategy of the expert advisor. This can be done with the help of the parameter known EA Strategy. This parameter lets you choose the main strategy of the expert advisor. As you can see in the settings of this automated trading tool, you can choose between two main trading strategies that are scalping and multi-level trading strategy.
After you have chosen the scalp strategy, then you need to go through the settings of this approach and fine tune this method to yield the best results. This process involves certain steps that are related to the parameters of XauBot Pro that have been developed for scalp trading. We will go through them in no particular order.
The parameters that are related to scalp trading include setting Stop Loss and also the Maximum Daily Stop Loss. Naturally, the first one is the stop loss that you set for each position and the amount of loss that you want your scalp positions to sustain. And the second one is the maximum amount of loss that you want your entire positions in the scalping method to sustain on a daily basis.
Then there are parameters such as Take Profit which lets you specify the amount of profit that you hope to obtain from each position in the scalping method. You can specify this amount of profits in terms of pips. This is a huge advantage because scalping has marginal and narrow profits, so being able to define profits in terms of pips will help you lock in even the smallest profits with this method.
Other parameters related to this trading approach are Risk Free After which allows you to specify a threshold after which your position is so-to-speak safe and risk free. And last but not least, there are two parameters known as Start Trading from and Stop Trading which clearly let you choose exactly when this automated trading tool should begin trading with the scalp trading method and when to stop doing so. This is also important because timing is more important in the scalp method than almost all other trading strategies and methods.
Such features and many others will help you get the best results from XauBot Pro in using the scalp method. Now let’s take a look at why the scalp trading method is advantageous.
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Advantages of Using Scalp Trading Method in the Forex Market
Scalping is one of the most favorite and widely applied trading strategies in all financial markets, and the forex market is no exception. So, having such a high level of popularity and prevalence should have good reasons. Let’s go through some of the reasons and advantages of why scalping is so ideal and can be potentially profitable in the foreign exchange market.
- You can begin trading with smaller initial capital. Due to the nature of this trading method, you do not need to have a high capital for trading in order to begin trading with this method.
- Positions are opened and closed very quickly. Another important advantage of scalping is that positions are opened and closed very quickly. This is an advantage because your assets are less exposed to the market changes and volatilities. Although, this can be a double edged sword and this small time period can also be the reason why there is risk associated with scalp trading.
- Fundamental analysis is less influential in this trading method. Again due to the special nature of scalp trading, fundamental analysis plays very little importance in the outcome of such trades. So it almost wholly depends on technical analysis and technical indicators.
- Profits are easily obtained because of the short term nature of this approach. Unlike certain other trading methods in which positions are kept open for a long time, in scalp trading where positions are opened and closed very quickly, profits are gained quickly as well. So this means you see the profits gained from each position very quickly. Though the profits that are gained are small and nominal. But if the process is repeated enough times, then these marginal profits can add up and build up to something substantial.
- This trading method works really well with automated solutions. The entire process of trading in the forex market can be automated, regardless of strategy or approach. But a particular aspect of scalp trading is that it is really suitable for being automated. Why? Because it relies heavily on technical analysis and processes of this trading method are carried out very quickly, if the entire process is left to an algorithm, then it can be executed better than a human trader. This is clearly seen with XauBot Pro and its scalping strategy.
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Conclusion
In this article we showed a step by step guide on how to use the scalping feature of XauBot Pro, including how to activate it as the main trading strategy of the expert advisor and also how to fine tune the settings related to this trading method. We also showed you the advantages that are associated with the use of scalp trading in the forex.
