Forex Trend Following VS Forex Scalping.

Let's take a quick view of trading. Trend following has been around for decades. Markets had to be viewed from a much different perspective than we can look at them now.

Because of this there is decades of information about trend following. That is why trend following is so popular. There is a direct relationship to the increase in individuals getting involved in the markets to the increase in the flow of market information to individuals. Hence, most individuals that started trading in markets typically where trend followers. Because of this growth in trend following. Trend following became a self fulfilling prophecy.

Online trading was not very popular until everyone had high speed internet access. Which statistics show was a little as over 5 years ago. This is when high speed internet began to become readily available.

Online trading is now the fastest growing segment of all markets. Because online trading is relatively new, so too is scalp trading. Which means there is mountains of information about trend trading, compare to the amount of available information about scalping.

The reality is that because scalping is still relatively new. Most individuals attempt to learn to trade a trend following technique and try and scale it down to a smaller time frame to trade on an intra-day basis. That concept does not yield consistent profits over time. But it is the direction most people take because there is more information available on trend following than scalping.


A common mistake the self-taught or trial and error trader makes is to co-mingle strategies and techniques. Ultimately becoming what I have labeled the 50/50 trader. Sometimes things work and sometimes they do not.

Which means trading performance was based on more luck than skill. As a scalper you do not use any trend following techniques. This means you have to be careful what type of information you are viewing.

Since 90% of the available information is founded on trend following. Once again that is where most start and why they are not successful attempting to scalp trade.

Scalpers need lots of volatility. Scalpers want the directional bias of the market to be changing constantly. Trend followers steer away from volatility. Trend followers need the directional bias of the market they are trading to be consistent.

Trend followers cannot trade in range-bound conditions. Trend followers typically have more losing trades than winning trades. They need the winner to overcome the losers.

Scalpers love range bound conditions and can trade in either condition (trend or range). Scalpers have more winning trades than losing trades. That keeps the trader in a positive frame of mind.

The forex is the perfect market for scalp trading. The forex is the most volatile market on the planet. This equates to more trading opportunities for the scalper. The forex is range-bound 80% of the time and trending 20% of the time.

To use a trend following technique trading the forex you have to use extremely large stops. Because of the consistent range bound activity that occurs. Because of the large stops (greater risk) trend following requires trading accounts in excess of $25,000 in order to aligned with sound equity management principles.

If a currency pair moves 75-100 pips a day. How easy would it be to find one 15 pip move? This would equal a net 10 pip profit on average. How would you like to make $500 in less than 30 minutes, instead of 6-8 hours? Scalpers do that. Trend followers have to hold on to trades for hours, days and weeks.

There is also a higher probability that you will be able to find a net 10 pip move daily than a 100 pip move. This means less stress and anxiety. Technology now makes scalping possible. We are now at a point where telephone access via a landline for the individual is at a decline. Cell phone technology has overtaken old telephone technology. Trend following is a dated style of trading. Scalping is on the leading edge of technology.

Trade 5 lots on one net 10 pip trade and the = $500 in under 60 minutes, instead of hours or days in a trade. There is simply no need to trend follow in the forex market. You can make the same money in less time.