Scalping Expert Advisor - Advantages and Disadvantages

Generally, "scalping" is a common term used to represent an expert advisor in automated trading. They usually have small profit targets between 8-10 pips with excess of 30 pips as stop loss orders. Most brokers do not consider earning profit 3 times the spread to be scalping. A scalping expert advisor will try to exit trades with very small profits (as mentioned above). It risks several times the amount won in effort to increase trader's success probability. Typically, this is a practice not approved by many brokers because these small changes can be easily predicted by those with direct information from bank and such information can be used against broker's disadvantage. The 2-5 seconds delay during data stream processing allows this practice.

There are advantages and disadvantages in using expert advisor scalper. By using money from market rapidly, the chances of success per trade increase significantly. However, bear in mind that the ratio of risk to reward is highly unfavorable- every loss has to be compensated with at least multiple profitable trades. This is considered risky in general terms. The other downside is that scalping expert advisor generally shows moving averages which can be lagging at times. Naturally, they work well when market conditions remain rather constant (with slow changes) which allows moving averages to change accordingly. However, this is highly unlikely in our fast-paced market conditions today. The slow reaction time proves to be a big disadvantage as it does not reflect the market value quite accurately.

It is safe to say that this system may have worked well in the past, when market conditions fluctuated less rapidly. If it means anything, past performances do not in any way reflect future results. Therefore, consider the advantages and disadvantages of expert advisor scalper carefully before you decide to take on this system.

If you want to make profit and looking for the FX expert advisors review, please visit FX-Orbital Expert Advisor.

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