More novice traders try forex scalping than any other method and there is a huge industry on the net, which sells courses and forex day trading systems, to help them achieve their dreams.

Unfortunately, that’s all they are dreams – because Forex scalping simply has never worked and cannot work.

It simply guarantees you will get wiped out.

Why?

Its obvious and common sense. Millions of traders each day, trade trillions of dollars and to say that you can work out what this huge mass of traders will do in just a few hours, is laughable.

ALL Short term price moves are random.

Volatility can and does take prices anywhere in daily time frames and support and resistance levels are not valid – you can’t get the odds on your side and you will lose.

So Why Do So Many People Do it?

Well it’s a good story and the majority of forex scalping systems are sold with one aim in mind:

To make money the vendor is much to sensible to trade it himself – he makes his money appealing to greed and selling it to a naive buyer, who then losses.

The vendor pockets the profit and the buyer gets a hard lesson in the market he wont forget.

But I Have seen track records that make money!

Sure, you have – but check the disclaimer and you will see the words – “hypothetical” and “simulated”.

Now this means that the track record was done in hindsight and simulated – KNOWING the closing prices!

How hard is that? A child, or anyone who can read and write can do that!

The problem with forex scalping comes when you have to trade it not knowing the closing prices, then the reality hits – a swift wipe-out of equity.

If you really want to prove this for yourself ask a vendor this simple question:

Can I please see YOUR track record of real time profits over 2 years or more?

Go ahead and try it and see what they say.

You won’t get one, or if you do, let me know – I have been asking this question for 25 years and never got one.

Forex day trading is a good story like little Harry Potter, the one the thing they have in common is their both made up.

So if you want to win and make money at forex trading, forget forex day trading and forex scalping and get the odds on your side.

This means, trading valid data and getting the odds on your side.

Try forex swing trading or long term trend following – both can work and you will be trading with the odds.

If you want to win at forex trading, then you need to do your homework and at least try methods that trade the odds, with forex scalping you could flip a coin and have as much chance of success.

Finally, maybe I am being a bit hard on scalpers and day traders if you find the elusive track record that makes money longer term, send it to me wonder what the odds are of that not happening?

Forex scalping is based on dumb logic and doesn’t work. Before we look at why, lets dispel the myth that vendors selling scalping systems make money – they don’t. You will always see this with any track record – read it carefully:

“CFTC RULE 4.41 – Hypothetical or simulated performance results have certain limitations. Unlike an actual performance record, simulated results do not represent actual trading. Also, since the trades have not been executed, the results may have under-or-over compensated for the impact, if any, of certain market factors, such as lack of liquidity. Simulated trading programs in general are also subject to the fact that they are designed with the benefit of hindsight. No representation is being made that any account will or is likely to achieve profit or losses similar to those shown”.

Personally I think the above should be banned and vendors should NOT be able to present track records that are not real, as they are totally meaningless.

Let’s face it who couldn’t make money knowing the closing prices?

My little Niece could beat George Soros (and she’s only 9) if she knows the closing prices! The problem is we can all be multi millionaires quickly with this info – but trading forex is a little harder, we have to trade not knowing the prices in advance.

Check any forex scalping track record you like and you will see the above or a similar disclaimer. I did see one that printed the vendor’s bank statements as proof the system made money but that profit was probably from selling systems not trading!

Of course there were no supporting broker statements.

So why is forex scalping destined to lose?

Think about how prices are determined:

Millions of traders all with different systems, motivations etc all as a mass group decide the price and you CANNOT Predict what this group will do in a matter of hours.

All short term volatility is random in nature, you cannot use short term levels of support and resistance, so you cannot get the odds in your favor and you therefore cannot win at forex scalping and that’s a fact.

Forex scalping and day trading is an area where you won’t make money, so don’t bother trying. If you must trade short term use forex swing trading – its still short term but you can get the odds in your favor and that’s what you need to win at forex trading.

Today there are many vendors who simply lie about the profit potential of forex scalping and hope the naïve or greedy trader falls for it – make sure you don’t.

Forex scalping always reminds me of the old burger king ad where they claimed to have more beef in their burgers than McDonald’s and in the ad the man picked the burger up and said:

“Where’s the beef?”

In forex scalping terms translated means:

Where is the real audited track record?

To be fair it’s not a fair comparison.

There was of course beef in the McDonalds burger – but you won’t find any profits in the track record of a scalper, just a made up track record done without trading!

So our lesson is in terms of forex scalping for beginners – forget it, try a different way of making money in forex and if you want to trade short term – try swing trading.

First we will look at Forex scalping and then another short term way of trading which is far more profitable. Why is it better than scalping?

Because Forex Scalping doesn’t work – All daily volatility is random, you can’t get the odds in your favour and if you cannot achieve this, you will never win.

Its pretty obvious really, in the space of a few hours, you are going to have decide what a vast mass group of traders numbering millions will do and there all different in terms of – the methodology they use, their skills, aims and emotional makeup and they don’t respect daily support and resistance.

While there are many who say Forex day trading work – it doesn’t and the vast amount of vendors you see selling systems, never have real results in the market to back up their claims, just a simulated back test, where they have the advantage of knowing all the closing prices! Well that’s so easy, anyone could do it.

So can you trade short term?

The answer is yes but you need valid support and resistance to key off and you can do it by forex swing trading. Its short term trading, with trades typically lasting a couple of days to a week – but you can get the odds on your side and that means you can win.

So if you want to win at Forex trading, forget Forex day trading and scalping and use a short term method that works – forex swing trading and enjoy currency trading success.

A swing trading system is easy to put together and the concept of overbought and oversold, is easy to understated and apply and will allow you to earn big profits in around 30 minutes a day.

Most traders have a psychological problem in running profits.

The typical forex trader gets a profit and feels pleased. The bigger it gets though, the more tempted he is to take it. Swings in price go back against his position and eats his open equity and this causes emotional problems.

The bigger the profit becomes the more tempted the trader is to take it. The trader ends up snatching the profit early, as open equity swings cause him to panic and he banks it and then what happens?

The trade continues the way he thought and goes on to pile up $10, 20 30,000 or more and he’s not in.

Its hard holding a profit in a long term trend and taking short term swings against you, by sometimes thousands a day – but if you want to catch and hold the long term trends that’s what you have to do.

It requires total understanding of your trading system and confidence in it – and this is why most traders can’t do it they are emotional “shoot from the hip” traders or following a guru.

A good forex trading system will normally win 30 – 50% of the time (forget the traders who claim 90% their lying) so your losers will be normally more or the at the same level as your profits. So you need to have a profit 3 – 5 times bigger than your loss to make good profits on your overall trading account.

Most traders simply don’t have the patience and discipline to follow long term trends but you must to win. However, look at the major forex trends and you will see they last for months or years and can make you rich – IF you can lock into and hold them.

Many forex traders simply can’t cope with trend following so they try day trading and vendors present it as way to scalp small profits and build them over time – good story, doesn’t work. Day trading is a loser’s game as all short term volatility is random.

If you find long term trend following to stressful, try forex swing trading as profits and loses come quickly and you don’t need to endure the open equity dips you do in trend following.

If you’re a novice cut your teeth on swing trading and build up your confidence and discipline to try long term trend following – if you can catch these trends, accept open equity dips and keep your eyes on the end prize, you could make huge profits.

Trend following is hard but very lucrative – if you have the mindset you can turn these trends into huge profits and understand forex money management is not just about taking losses its also about accepting big profits to.

There are effectively three common types of trend following:

Forex day trading, swing trading and long term trend following lets look at all three

Forex Day Trading

The most popular and simply a guaranteed way to lose money – all short term volatility is random making support and resistance meaningless.

Its sounds good in theory and it makes a good story for vendors.

They sell systems that are based on worthless, hypothetical simulations which have never been traded. They don’t have a real track record and the reason is day trading simply doesn’t work.

I find it baffling that intelligent people try it and think they can in a few hours tell what a huge mass of millions of traders will do – Avoid or lose!

Forex Long Term Trend Following

The long term trends last for months or years as they reflect the economic health of the country and they are extremely lucrative if you have the patience and discipline to follow them.

The problem is many traders find it hard to follow a long term trend when volatility can eat into open profit sometimes by thousands a day. It’s rewarding, but its tough, even for experienced traders – but if you have the mental discipline and patience to do it, it’s the most lucrative form of forex trend following.

Forex Swing Trading

This is taking smaller movements with the major trends.

You are aiming to take advantage of moves that can last for a few days to a week or two. This method is perhaps the easiest for novice traders.

It’s simple, there is plenty going on and you are right or wrong quickly which means that it’s not so mentally demanding.

Of the three methods I would say that novice traders should cut their teeth on swing trading and progress to longer term trend following later if they wish.

If you are long term trend following or your forex swing trading you can learn a simple system that can be effective in about a week.

All you need to do is understand support and resistance and use a few momentum indicators to help you enter your trades – and that’s it. Combine the above with sensible money management and your all set.

How much can you make?

If you are long term trend following if you can make 50 – 60% of the major trends you would be doing well and be very rich. On forex swing trading your aim should be up to 70% of the move.

Whichever you do you don’t predict – use price momentum indicators and the price to time your entry and only trade on the reality of the price you see.

The fact is there are trends all the time you can trade for profit – but most traders like to argue with the price, predict or second guess it and lose.

If you don’t and just focus on trading the reality of price as it is, you could enjoy tremendous currency trading success.

Day trading or scalping is a method where traders seek to take advantage of intra- day moves of a few hours and use support and resistance levels in this period to determine when to execute their trading signals.

The problem is it doesn’t work. You have countless millions of traders trading with different forex trading strategies and methods, all with different motivations and to say what this group of traders will do in such a short time span, is laughable.

Of course, you see lots of short term trading strategies claim to make money but none them do. If you see a track record of profits, then you will see the disclaimer below as well – read it and you will see why the track records are meaningless:

“CFTC RULE 4.41 – Hypothetical or simulated performance results have certain limitations. Unlike an actual performance record, simulated results do not represent actual trading. Also, since the trades have not been executed, the results may have under-or-over compensated for the impact, if any, of certain market factors, such as lack of liquidity. Simulated trading programs in general are also subject to the fact that they are designed with the benefit of hindsight. No representation is being made that any account will or is likely to achieve profit or losses similar to those shown”.

So there you have it – they have never been traded and are made up.

All moves in a day are random and that’s why you never see a real track record of gains – day trading is a mugs game – Avoid it!

Forex Swing Trading

The other short term trading strategies are based around swing trading which tries to catch the intermediate moves in trends or trading ranges and these moves normally last for between 2 days and a week.

This method works and is an excellent way for novice traders to trade, for the following reasons:

1. It’s easy to devise a swing trading system based around support and resistance, momentum and breakouts.

2. There are lots of opportunities – which is an advantage as most traders are impatient.

3. You take profits and losses quickly, normally within a few days – so you don’t need the discipline to sit on trades for long periods.

Swing trading is essentially taking advantage of trades that last anywhere from a few days to a week and taking advantage of over bought / oversold scenarios and these tend to occur all the time.

If you want short term trading strategies for profit, take a closer look at swing trading and you will find it a great way to trade especially if you’re new to forex trading and forget forex day trading all it means is guaranteed losses

By using a swing trading strategy not only can you overcome these problems, you can give yourself a great chance of currency trading success.

Let’s look at this forex trading strategy in more detail

1. Patience

Most novice traders lack patience and they think the more they trade the better.

Most go for forex day trading which is probably the best way to lose money you can get – day trading simply does and cannot work, due to the fact all short term volatility is random.

You can never get the odds in your favour and you can never win – PERIOD.

Other traders however lack patience when long term forex trend following – they simply cannot accept the profits it wants to give them!

We all want profits – but when you sit on a long term trade and see open equity dips of thousands of dollars the temptation to take it is huge and most novice traders bank profits far to soon.

If you are forex trend following you need to take a bit more risk and that means hanging on for longer term gains.

Most traders simply don’t have the patience and discipline to do this and it’s hard even for pro traders.

Swing trading when incorporated in a forex trading strategy overcomes the problem.

You are looking at making profits in periods of 3 days to a few weeks, so you are never holding a position for long periods, and there are plenty of opportunities to keep the trader interested and finally, stop loss protection can be tight keeping risk low.

Forex swing trading is easier than long term trend following as you don’t have to be so patient, it’s easy to maintain discipline, which is the key to big forex gains.

2. Swing Trading is simple

Swing trading tends to be quite simple to learn.

All you need to do is look at support and resistance and use some momentum indicators to time your trades.

One or two timing indicators are all you need to judge price momentum as it moves into test support and resistance and your all set to swing trade.

Being simple to understand is a big advantage, because from understanding comes confidence and from confidence, flows discipline – the key to successful trading is having the disipline to foloow your plan through periods of losses and is a trait all succesful traders have.

So if you want to trade currencies then try swing trading its simple, easy on the mind and can be very profitable.

Consider it as part of your forex trading strategy and let it help lead you to the currency trading success you desire.

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We can take advantage of the large price swings within the forex market by knowing what to look for and thinking contrarian. Anyone can sit down at a price chart and if it is going higher make the observation that they think it will continue higher. This same mentality is what gets many traders into trouble however. Often times beginning traders are nervous or fearful to enter the market, this is usually a result of them being un-confident in the method they are using and/or using too much leverage, which means trading too big a position size for their trading account. Managing position size is a direct result of self-discipline and control over one’s own emotion, unfortunately this skill cannot really be taught, it is generally acquired through trial and error or from belief in the teachings of a mentor or professional trader who is already made the same discipline errors their self. The skill of reading price movement and learning to trade and think contrarian is however a skill that can be taught.

The power of price action analysis lies in is ability to allow traders to see possible price direction before it occurs in the forex market. Often times large moves in the forex market terminate in a specific reversal pattern that we can learn to spot and use to our advantage. Many traders will feel good about a market as it trends in one direction and often times right when the trend is at its peak or trough is when many traders enter due to the safe feeling they get from such a powerful movement. Unfortunately feeling is not something that is useful to the successful forex trader. Professional forex traders know that the market moves contrarian to what the masses usually expect, consequently they will trade contrarian to what most forex traders are doing and generally use a method like price action analysis that gives them a clear and concise method to enter and exit a trade.

Price action setups can help to safe-guard a forex trader from jumping in with the amateurs just as a strong move is ready to reverse. Developing a keen eye for specific price action setups is the best tool that one can employ to take a contrarian mindset in the forex market. Analyzing the raw price data inherently supplied by the forex market with no lagging indicators is the best way to develop your contrarian forex trading skills. Once you develop this skill you will start to pull apart for the masses of amateur traders who are constantly losing money and become one of the professionals taking it.