CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. Between 74-89% of retail investor accounts lose money when trading CFDs. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Between 54-87% of retail CFD accounts lose money. Based on 69 brokers who display this data. *Availability subject to regulation.
Scalping refers to a method of forex trading where the trader opens and closes positions within a few minutes or seconds of each other, with the sole purpose of making small profits which can then be accumulated over time to result in more significant earnings.
By quickly opening and liquidating positions in a time frame that does not usually exceed five minutes, traders hope to make small amounts of profit without subjecting their accounts to the market uncertainties which can hit trades that are left open for much longer.
Scalpers prefer to take the small profits that are available to them on open trades rather than leave trades open for a long time and subject such trades to market uncertainties. Of course, there is still potential for scalping to lead to losses.
It’s important to remember that not all brokers allow scalping on their platforms. Typically scalping is only allowed on accounts that are operated on ECN platforms. Not only is the ECN trading condition generally better for scalpers in terms of execution speeds and in terms of having a no-slippage environment, it can also be better for ECN brokers as the greater number of trades taken by scalpers will lead to more commissions being earned from both trade entries and trade exits.
On that note, here are five things to consider when choosing a broker for scalping:
Usually, brokers will indicate in their Terms and Conditions document whether scalping is allowed on their platforms or not.
There are jurisdictions where the regulators of the forex industry have rules that specifically prohibit scalping. Therefore, you need to know if the broker you intend to use is located in such a jurisdiction.
As stated earlier, scalping is usually acceptable on ECN accounts because a commission is charged for trade entries and exits in addition to spreads. Furthermore, ECN brokers do not act as counterparties, so they have nothing to lose from traders making repeated small profits or losses from scalping. In contrast, market makers do not charge commissions on trades and act as counterparties to trades, so they stand to lose if traders keep making consistent profits from scalping. Many market makers do not allow scalping on their platforms.
In scalping, the speed of entry and exit is essential in setting up a trade. Your intended broker must be able to provide fast price feeds, so you are sure you are getting prices which are up to date. Speed matters and delayed price feeds are detrimental for scalpers.
Where you have doubts as to what the terms and conditions of your broker say about scalping, you can settle these doubts by contacting the broker directly via email or live chat. A reputable broker should be able to provide a definitive statement on whether you are allowed to scalp or not.
When it comes to scalping, traders should pay particular attention to their broker’s terms and conditions (T&Cs) to know what is allowed and what is not. This will help prevent problems down the road. Some main things traders should look out for include:
Where there are doubts about whether scalping is allowed or not, contacting the broker directly before opening an account would be advisable.
Forex.com scored best in our review of the top brokers for scalping , which takes into account 120+ factors across eight categories. Here are some areas where Forex.com scored highly in:
Forex.com offers one way to tradeForex . If you wanted to trade EURUSD
The two most important categories in our rating system are the cost of trading and the broker’s trust score. To calculate a broker’s trust score, we take into account a range of factors, including their regulation history, years in business, liquidity provider etc.
Forex.com have a AAA trust score . This is largely down to them being regulated by Financial Conduct Authority, segregating client funds, being segregating client funds, being established for over 19
|Regulated by||Financial Conduct Authority|
|Uses tier 1 banks|
|Segregates client funds|
Want to see how Forex.com? We’ve compared their spreads, features, and key information below.
|USD/JPY Spread||0.90||DAX Spread||250.0|
|FTSE 100 Spread||150.0|
|Platform||MT4, Web Trader, NinjaTrader, Tablet & Mobile apps|
|Base currency options||USD, GBP, EUR|
|Funding options||Bank transfer, Cheque, DebitCard,|