To begin with it let’s understand what means scalping and pips. Such method of trade is used for profit earning on fluctuations in day. Thus time of a life of an open position can reach only several minutes. Naturally, the profit under each separately taken bargain will not be significant, but the basic earnings are reached at the expense of great volume of made operations.

Some traders make in a day to 200 bargains. It is not necessary to expect that all of them will be profitable. A main objective begins totally following the results of day to have profit by doing operations. For this purpose level of stop loss is put as it is possible more close to the price, on which the item opens to ensure the minimum loss in case of adverse movement.

The forex market is the liquidity market. This phrase was heard time and again even by the person, only started to study a trade basis. The price even in day has recurrence that is there are periods of takeoffs and falling. Thus if as a whole during the day the price has passed an order of 50 items the difference between the maximum and minimum prices for a day will reach much bigger significance.

If thus to catch smaller fluctuations, for example, max – min hour possibility considerably to increase the capital repeatedly increases from it also the desire to use similar strategy of conducting trade. At beginners the impression about fabulous increase in the capital can be made also if to add reinvesting possibility. However the impression it is deceptive, despite an abundance of stories about lightning increases in the capital many times over, such trading system is doomed to failure. Let’s try to consider, why.

First, at statement of very close level of restriction of losses, the probability is very great to catch loss only on market noise even having guessed truly a tendency direction, but having underestimated opposite enough force of bulls and bears. It is very easy to be mistaken, advancing a direction the next hour. It is much harder than to advance the purposes of movement of day.

The simplest decision from operation of the warrant fixing the loss, absence of the warrant but then you risk to lose even more means after strong movement against you when the price has left so far that it is not obviously possible to recoil to initial levels the next minutes or hours. At trade in the big share of the deposit absence of restrictions of losses can lead to losing all deposit.

The second reason is the nervous tension arising at trade with real money. As a rule, such strategy apply at first on a demo-account where money virtual, therefore the fear to lose them is absent, and trading operations are made automatically, that it is instant. Thus, factors, such as operations and a nervous tension which grows with each item of change in price in an opposite direction are imposed speed. Pips sing assumes a constant finding in the market that means by itself constant stress, and in a stress condition it is impossible to make rational acts.

For those who want to participate in forex trading should start from learning the basics of this market to make sure you do not have problems with this industry.

There is another option – you can hire professional traders to managed your trading account – read more about forex investment here. Also make sure to search for the knowledge in a good forex book.