Scalping is a trading technique that a lot of traders look at when they want to make money on the forex market.  There are two ways that this can be done and that is technically and fundamentally.  There are a lot of traders who do not realise that you can scalp the foreign exchange rates fundamentally because of the short-term nature of the technique.  If you are looking at scalping then you should consider whether you would want to do this fundamentally or not.

How Do You Trade Foreign Exchange Rates Fundamentally?

When you look at scalping the forex market fundamentally you have to know how you can trade with fundamentals.  Fundamental analysis of the forex market will include the analysis of news events and releases.  When you look at a new release you have to consider what the historic effect has been on the market and whether this will happen again.

Most fundamental releases will cause a trend or movement in the forex market.  How long this movement lasts depends on the level of impact that the news has on the currency value.  Some releases have a very long-term effect while others have a short-term effect.  Of course there are other releases that o not cause a movement at all.

How do You Scalp the Market

Before you can look at fundamental scalping you have to know what scalping is.  Scalping is a short-term trading strategy where you open a position and wait for a small profit.  The profit you can make from a single trade with scalping varies from 2 pips to 5 pips.  The trade should never be open for longer than 5 minutes and you need to have strict risk management steps in place.

Scalping is a trading technique that is not actually recommended to new traders.  The fast paced nature of the trades and the amount of leverage generally used makes it too risky for new traders.  There are also a lot of forex brokers that do not allow you to scalp on their trading platforms.

How to Scalp Fundamentally

Once you know about scalping and fundamental analysis you have to consider how you can scalp fundamentally.  When you scalp fundamentally you will look for any impact level news release.  If the release will affect the market in some way you can use it for scalping.  When the news release hits the forex market you have to be ready to take advantage of the movements.

There are many releases that cause a fake out in the first minute after the releases hits the market.  This fake out will trend in one direction then reverse.  The trend may then continue in the original direction or it could turn completely.  It is possible to make a profit from this fake out when you use scalping.  The short-term nature of the traders allows you to open a position on the fake out and close it before the turn comes.

When you scalp fundamentally you have to combine this with technical analysis.  You need to use the technical analysis methods for scalping to determine when to enter the market and which way the market will turn.