Pipsing is a trading style whereby traders make a lot of trades each of which produces very small profits (virtually worth a couple of pips). Some traders believe that pipsing and scalping are basically the same thing. There are also those who believe that pipsing is a part of the scalping strategy since with scalping you make short-term trades that last several minutes, while when it comes to pipsing, trades can be several seconds long.
In this article, we are going to discuss what forex pipsing is, its psychological aspects, benefits, and challenges, as well as technical features that can be a decisive factor in the outcome of your trades.
In essence, pipsing is a forex strategy used by traders to make a profit from price fluctuations in the course of the day. This is what its distinctive features are:
Accordingly, by choosing pipsing as their trading style, the traders need to factor in certain technical peculiarities that are irrelevant when it comes to other trading strategies. These include:
You can find out more about this trading style in the book “50 Shades of Forex”. It will help you decide whether pipsing is the right choice for you or maybe it’s better to opt for another trading strategy.
Now you know what pipsing in Forex is. This trading strategy involves particular psychological aspects, which is why your personality type plays a crucial role here. How quickly you react to changes in the trading environment, and your ability to focus and deal with stress and emotionally challenging situations are essential. Pipsing is a physically and mentally demanding trading style which, however, has many advantages.
If you decide to try your hand at pipsing, keep in mind that you will be making loads of trades with a different outcome. By the end of the day, the yield curve may look kinked.
But it’s fine as long as your end result shows that you are trading in the black. Professional scalpers and pipsers came up with three main rules to help you succeed:
Now let’s get to the most interesting part. What strategy to choose for pipsing? To spot the entry points, the traders use:
You can choose other techniques based on your preferences and needs. But how do you figure out that a particular trading strategy works in your specific case? The rules are a no-brainer: pick the one that is clear to you and whose signals you can spot easily, the one that is suitable for you in terms of speed with which the position is opening, and, last but not least, the one that proves to generate profit based on results of 1-2 days of testing.Login in Personal Account