Retail foreign exchange trading is a small segment of the larger foreign exchange market where individuals speculate on the exchange rate between different currencies. This segment has developed with the advent of dedicated electronic trading platforms and the internet, which allows individuals to access the global currency markets. In 2016, it was reported that retail foreign exchange trading represented 5.5% of the whole foreign exchange market ($282 billion in daily trading turnover).
Prior to the development of forex trading platforms in the late 90s, forex trading was restricted to large financial institutions. It was the development of the internet, trading software, and forex brokers allowing trading on margin, that started the growth of retail trading. Today, traders are able to trade spot currencies with market makers on margin. This means they need to put down only a small percentage of the trade size and can buy and sell currencies in seconds.
Trading however in Forex is not an easy thing to do. This heavily liquid market is open around the clock and its the 1st market everyone taps in every breaking news. If you were to invest any sum of money, you would need to be on top of your investments around the clock, no matter where you are residing. Say for example you reside somewhere in the western Europe and given all your hard-work and endless time and effort of research you have positioned yourself properly and (in the absence of a market moving event) correctly as to the direction of the USD in the upcoming month. You go to bed on a Monday confident of your choices and placement in Forex but wake up on a major incident that occurs overnight in Asia.. WHAT THEN ???
The use of machines to protect and facilitate your investments has increased enormously, since their need has become more and more apparent.
I have concluded in the use of a few of trading tools when it comes to FOREX trading. All of them are cost-efficient and allow me to execute my trading strategies in a semi-automated and most importantly efficient way.
The first product I have found to use in the FOREX Market with customized settings according to my preferences and directions is called ALFA SCALPER for two of its main features; scalping and automation.
What is scalping?
Scalping is the shortest time frame in trading and it exploits small changes in currency prices.Scalpers (those following this strategy) attempt to act like traditional market makers or specialists. To make the spread means to buy at the Bid price and sell at the Ask price, in order to gain the bid/ask difference. This procedure allows for profit even when the bid and ask don’t move at all, as long as there are traders who are willing to take market prices. It normally involves establishing and liquidating a position quickly, usually within minutes or even seconds.
The role of a scalper is actually the role of market makers or specialists who are to maintain the liquidity and order flow of a product of a market.
The profit for each transaction is based only on a few pips (basis points), so scalping is typically conducted when there are large amounts of capital and high leverage or there are currency pairs where the bid-offer spread is narrow. Sounds like a hard task to do ? At first it does and by choosing to do it manually it certainly is, let alone increasing the risk of making more bad trades than profitable ones, but this tool seems to be working quite well for me in the last couple of months.
A word of caution: a tool to use in trading is always just a tool not the decision maker, so if you give it a try make sure to setup your trading preferences and constantly review and readjust them. I only use trading tools to save me time from positioning in the market and protect my investments, NOT to make me money.