There are many profitable robots now available in the market which can be used for trading automatically. Many of these robots use scalping as their primary trading strategy. Scalping can be done at any time. Now, before we talk about how to secure a scalping robot, we need to understand a little bit what scalping is in order to know how to secure the scalping robot! There are many trading strategies. One of the most popular trading strategies among traders is scalping. Scalping can be done in almost any market like stocks, futures, commodities or Forex. It doesn't require any market analysis or trend analysis and can be done almost without using an indicator.
Scalping is especially popular among currency traders. As a Forex scalper your goal is always to look for a few pips like 3-12 per trade. Now every trade has a cost in the form of a spread that you have to pay when you make an entry or exit. Like most of the time, the spreads offered by brokers usually do not exceed 3 pips, as a scalper you need to make at least 3 pips per trade to break even.
When you are scalping you should ignore the rules of risk and money management. Most of the time, scalpers trade with no stop loss or have a wide stop loss of up to 30-70 pips. Their goal is to simply get in and out as quickly as possible by making a few pips.
Now, having such a huge stop loss is too risky. It is not trading, it is more gambling. You are willing to make a small profit at the expense of a huge loss. A loss and you have it! If your goal was to only make 5 pips and your stop loss was 40 pips, you will need to make 8 winning trades in a row to break even.
I mean to make 3-12 pips you are ready to lose almost 50-100 pips. Scalping therefore requires a lot of experience! Is there a safe way to scalping? There is a simple method that you can use for scalping.
If you have been trading for a while, now you should have a good intraday trading system that you use on a daily basis to make money. Use this same intraday trading system with the usual profit tak target of 100 pips with the usual stop loss of assuming 30 pips. Since you are using this system to trade and not to gamble, you would likely do market analysis and only enter a trade that you think is a high probability trade. Just add a trailing stop of say 10 pips to this system. So in case the market retracts you are stopped by the trailing stop and your profit is locked in. If the market doesn't follow, you end up doing what you planned in the first place.
Since scalping is one of the most popular trading strategies and many traders use it daily to make 30-70 pips each day. Many robot developers have also programmed their robots to do scalping in rapid succession. Many profitable bots use this scalping strategy as their primary strategy. Now the problem is, these bots are scalping without using a stop loss. This makes these robots too risky. A big loss and you will take a long time to recover. So how do you go about it. Just change the default settings and place a small stop loss. Back test the robot! If it works and performance is good, test ahead on a demo account. In case, the test before is also satisfactory only then, trade live with such robot. Otherwise, simply avoid trading with such a scalping robot as it would be too risky for the capital of your trading account!