Why don’t Forex brokers like scalpers?
Trading strategy of scalping is one of the most popular among Forex traders. It allows you to use 100% of the fast earning opportunities that the margin arm provides
During the trading strategy scalping speculator opens a large number of deals, the duration of which is only a few minutes, if not seconds. Such operations allow you to get a small profit in the amount of several points. However, not all positions can be closed with profit. That’s why a scalping trader has to open a huge number of orders
At first glance, it may seem that any broker should be pleased to be able to serve such clients, because they can bring additional funds to their budget in the form of commissions for transactions. If the scalper has a deposit of 10 thousand dollars and uses leverage of 1:200, the size of the minimum spread will be about 100 dollars. Taking into account the possible number of opened deals, the profit of the broker can even exceed the size of the trader’s deposit at the moment of the beginning of trading
However, many dealing centers continue to block accounts of their clients using scalping. They limit the minimum duration of the transaction to 15 minutes. When opening several orders it is allowed to carry out a certain number of less lengthy operations, but usually they constitute a small percentage of the total number of transactions.
The reason for this attitude to scalpers is the creation of additional load on the broker’s commercial equipment, designed for a certain capacity. When a large number of orders for opening positions are received, the server may start working slower or even hang at all.
This situation is similar to the DOS-attack on the site, during which a huge number of requests are sent. Given that the number of clients of a brokerage firm using scalping can be in the thousands, it is possible to understand the scale of possible consequences of such actions. The equipment of the brokerage company may fail, as a result of which other clients using this server will suffer. Of course, no broker wants to spoil his reputation in the Forex market. Therefore, many dealing centers prohibit the use of scalping
In order for a trader not to suffer from the blocking of his account, he needs to find a broker that allows trading by scalping strategy. As a rule, the equipment of such brokerage companies is characterized by increased capacity, which allows to process a huge number of requests.