What exactly are pipsing and scalping? This type of trading is used by traders to profit from intraday market fluctuations. These trades are typically held open for no more than a couple of minutes. While a single trade won't yield a significant profit, the key principle is the large number of such trades. Traders like pipsers and scalpers can execute up to 200 trades in a single day. Don't expect every trade to be profitable. The key is to have a positive outcome at the end of the day. To achieve this, a stop-loss level should be set as close to the opening price as possible to minimize losses if the price moves in the opposite direction. Forex is known to be a highly liquid market. Throughout the day, prices rise and fall at certain points, following a cycle. If the price moves approximately 60 pips throughout the day, the difference between the daily high and low will be much greater. The chance of increasing profits increases even more when trading, for example, on hourly fluctuations (highs and lows). This is the reason why pipsing and scalping are so popular among traders. Those new to the Forex market may think they can earn astronomical amounts of money this way, and considering the possibility of reinvestment, these figures can be simply unrealistic. But not everything is so rosy, although the internet is full of stories of traders who, thanks to pipsing and scalping, multiplied their deposits several times in an instant. Using this trading strategy will not lead to success. Let's find out why. First, setting a stop-loss level too close increases the likelihood of suffering a loss with the slightest price fluctuation, even if you manage to predict the future movement but incorrectly assess the inverse force of bulls and bears in the market. It's much easier to make a mistake in determining the direction of a short-term (one to two hours) than in determining the direction of a movement for the entire day. To avoid opening an order that would lock in a loss, it would be easiest to simply not place it. However, if the undesirable movement continues, the loss could increase even further, and then it will become clear that there will be no pullback in the next hour or less. Moreover, by leaving the majority of the trading account's funds as collateral and not using stop-loss orders, the account can be pushed to a margin call, which means losing all funds. Secondly, there's the anxiety and excitability that most traders experience because they're dealing with real money. This type of trading is often tested first on a demo account, because the money on it isn't real and losing it isn't a concern. Therefore, when trading on a real account, anxiety and excitability increase with every pip of a negative move. Pipsing and scalping require traders to be constantly in front of the trading terminal, which means constant stress, leading to unwise actions.