What is Scalping?

Scalp traders aim to harvest profits from small price moves. Their goal isn’t to make a lot of profit with each trade, but small profits over and over again. If they do it well, they’ll grow their trading account over time. Scalp traders often use leverage and tight stop-losses.

A perfect asset which could have been scalped under such conditions was posted here in CCP Group: The act of Scalp Trading is known as “Scalping“. Scalping can be very profitable for traders who decide to use it as a primary strategy, or even those who use it to supplement other types of trading. Adhering to the strict exit strategy is the key to making small profits compound into large gains. No greed – lalach bohat buri bala hai

Points Scalp Traders may consult :

  • Trading Volume
  • Support and Resistance Levels (to plan entry and exit)
  • Price action
  • Technical Indicators like RSI,MA, VWAP etc
  • Order Book analysis is another tool which can help (more buyers means price will increase due to demand)

Two Common types of Scalp Trading Strategies

  • Discretionary – I mostly fall in this category and the limited know-how of the market I have. Discretionary traders make trading decisions “on the spot,” as the market unfolds before them. They may or may not have a specific set of requirements for when to enter or exit, but their decisions are based on the conditions at hand. In other words, discretionary traders may consider many different factors, but the rules are less rigid, and they rely more on intuition and gut feeling
  • Systematic – Systematic traders take a different approach. They have a well-defined trading system that essentially triggers entry and exit points for them. If certain conditions of their ruleset are met, they enter or exit a trade. Systematic trading is a much more data-driven approach than discretionary trading. Systematic traders rely less on intuition and more on data and algorithms.

I haven’t use any trading bots for years, the ones I used sucked but I am sure with all this “AI” and “DL” things might have improved, back then these words weren’t invented. However another scalping technique involves exploiting the bid ask spread . If there is a considerable difference between the highest bid and the lowest ask, scalpers can profit off that. This kind of strategy is more suitable for algorithmic or quantitative trading. Humans aren’t as reliable at finding small inefficiencies in the market as machines. As a result, this field is heavily saturated with trading bots. As such, humans who want to adopt this strategy will generally have to compete with algorithms. Do read the Cryptocurrency Beginners Guide if you are starting off and if you want to start off Scalping, Start it on Binance (5% discount). Again, I am no expert and all these definitions and explanations can be searched aswell, but whatever you do just don’t rush into something, never think that If I didn’t place a bid this offer /price will never come back – it will always come back some day or you can place a bid for higher profits !!!

Discuss in Cryptocurrency Pakistan Facebook Group : Scalping Post

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