Scalping is a popular trading strategy among many forex and CFD traders. It involves making a large number of quick trades, aiming to profit from small price movements. If you’re considering using IC Markets as your broker and are interested in scalping, you’ll want to know whether this strategy is allowed. In this article, we’ll dive deep into the details to answer the question: does IC Markets allow scalping?
What is Scalping?
Before we look at IC Markets’ stance, let’s be clear on what scalping is. Scalpers enter and exit trades in a very short time frame. This could be within seconds or minutes. They rely on small price changes. For example, in the forex market, if the EUR/USD currency pair moves just a few pips (a small unit of price change), a scalper might close their position to take a small profit.
Scalpers often make many trades in a single day. They use leverage to increase their potential profits from these small price movements. But leverage also means higher risks. If the price goes against them even a little bit, their losses can add up fast.
IC Markets’ General Approach to Trading Strategies
IC Markets is known as a broker that offers a wide range of trading instruments. These include forex pairs, indices, commodities, and CFDs on stocks. They also provide different types of trading accounts to suit various traders’ needs.
Account Types and Flexibility
IC Markets has several account types. Their Raw Spread account is popular among active traders. It offers low spreads, but traders pay a commission per trade. The Standard account has slightly wider spreads but no commission.
These account types are designed to be flexible. This means that, in general, IC Markets doesn’t restrict traders to only certain trading styles. They understand that different traders have different strategies. And this gives us a clue that they might be open to scalping.
Technology and Execution
IC Markets uses advanced trading technology. Their platform is built to handle fast trade executions. This is important for scalpers. When you’re making quick trades, you need the platform to execute your orders without delays.
They use Electronic Communication Network (ECN) and Straight Through Processing (STP) systems. These systems connect traders directly to the market. This helps ensure fair prices and fast order fills. All of this suggests that IC Markets is set up in a way that could support scalping.
IC Markets’ Official Policy on Scalping
IC Markets does allow scalping. They have no specific rule against this trading strategy in their terms and conditions. This is good news for scalpers. It means you can use this strategy on their platform without breaking any rules.
No Time Restrictions
One key thing is that IC Markets doesn’t put time restrictions on how long you can hold a trade. Some brokers might say you have to hold a trade for a minimum amount of time. But IC Markets doesn’t. So, if you want to enter and exit a trade in just a few seconds, you’re free to do so.
No Limit on Trade Frequency
They also don’t limit how many trades you can make in a day. Scalpers often make dozens or even hundreds of trades in a single trading session. With IC Markets, you won’t face a cap on this. As long as you have the funds in your account and meet the margin requirements, you can keep trading.
Conditions for Scalping on IC Markets
While IC Markets allows scalping, there are some things you need to know. These conditions can affect your scalping experience.
Spread and Commission
If you’re using the Raw Spread account, you’ll pay a commission per trade. But the spreads are very low. For scalpers, this can be a good option. Small spreads mean you don’t need the price to move much to make a profit.
On the Standard account, the spreads are wider. This can make scalping a bit more challenging. You’ll need the price to move a bit further to cover the spread and make a profit. So, choosing the right account type is important for successful scalping.
Leverage and Margin
IC Markets offers high leverage. Leverage can be a double-edged sword for scalpers. It can increase your profits, but also your losses. You need to manage your margin carefully.
If the price goes against you, and you don’t have enough margin in your account, you could face a margin call. This means your broker will close some or all of your positions to cover your losses. So, when scalping on IC Markets, you should keep an eye on your margin levels.
Market Conditions
Scalping works best in liquid markets. When there’s a lot of trading activity, prices are more stable. Spreads tend to be narrower. IC Markets offers access to many liquid markets. But sometimes, during news events or market volatility, things can change.
Spreads might widen suddenly. This can make it harder to scalp profitably. You need to be aware of when major economic news is due. And you might want to avoid scalping during these times of high volatility.
Tips for Scalping on IC Markets
If you plan to scalp on IC Markets, here are some tips to help you out.
Choose the Right Account
As mentioned, the Raw Spread account is often a good choice for scalpers. The low spreads can give you an edge. But make sure you understand the commission structure. Calculate whether the overall cost works for your scalping strategy.
Use Stop Loss Orders
Stop loss orders are a must for scalpers. Since you’re making quick trades, a small price move against you can hurt. A stop loss order will automatically close your position if the price reaches a certain level. This limits your losses.
Practice First
If you’re new to scalping, don’t jump in with real money right away. IC Markets offers a demo account. Use it to practice your scalping strategy. Test different entry and exit points. See how the platform works for fast trading.
Stay Informed
Keep an eye on market news. Know when important economic announcements are coming. Avoid scalping during times when the market is likely to be very volatile. A calm, liquid market is better for scalping.
Comparing IC Markets with Other Brokers on Scalping
Not all brokers allow scalping. Some have strict rules against it. Others might allow it but with many restrictions.
Brokers That Restrict Scalping
Some brokers say you can’t scalp because they think it’s too risky. Or they might worry about the impact on their systems. These brokers might have rules about minimum trade durations. Or they might limit how often you can trade.
Brokers That Are Similar to IC Markets
There are a few other brokers that are open to scalping, like IC Markets. But each has its own pros and cons. Some might have higher spreads. Others might charge more in commissions. When choosing a broker for scalping, compare all these factors.
Conclusion
So, does IC Markets allow scalping? The answer is yes. They have no rules against this trading strategy. Their account types, trading technology, and overall approach support scalping. But like any trading, there are conditions and risks.
You need to choose the right account, manage your leverage and margin, and be aware of market conditions. With the right approach, scalping on IC Markets can be a viable trading strategy. If you’re a scalper looking for a broker, IC Markets is definitely worth considering.
Related topics:
Is Scalping a Trading Strategy?
How Did Scalping Start: A Guide for Beginners
