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A scalper is a trader who makes money on short-term changes in the price of an asset. Scalpers use technical analysis to identify possible price movements and enter into positions for short periods of time, often less than a minute.
Scalpers usually look for highly liquid instruments such as currency pairs, indices and futures, and focus on small intraday price changes. They use margin financing to increase their buying power, which allows them to make large profits from small price changes.
Scalpers can use several strategies to make money. One of the most common strategies is to place buy and sell orders a short distance from the current price to capture quick market movements. They may also use indicators and chart patterns to determine entry and exit points.
Finally, scalpers use strict risk management to manage their losses. They usually use stop-loss orders and cash management strategies to limit losses and keep their capital safe.
In general, scalpers can make money from short-term market movements by using technical analysis, margin financing and risk management strategies. However, it requires a great deal of knowledge and experience to be successful in this type of trading.
A scalper’s main goal is to make as many short-term trades as possible during the trading day to earn a significant total return.
Depending on the type of scalping a trade may last from a few seconds to half an hour. The fastest and most strenuous option is scalping, where positions are held for a few seconds to a minute. Mid-term scalping allows you to open 5-10 orders for 15 minutes maximum. Conservative scalping involves holding a position for up to 30 minutes, especially if the trader catches the trend. The shorter trading hours, the more trades you can open every day, increasing your potential profit.
It is impossible to tell exactly how much money scalpers can earn daily. The total daily income of a trader depends on the number, duration and reliability of executed orders. Scalpers usually make 2-3 to 5 pips profit. But if a trader catches the trend and does not hurry to close the transaction, fixing the minimum profit, the income from the transaction can be higher.
The scalper’s daily income also depends on the commission he pays to the exchange. A commission is charged for each transaction, so it is important to choose a trading floor with the best conditions so as not to give half of the daily income to the exchange.
Fast access to the market: speed of reaction to price changes is critical for a scalper, so he needs to have a fast internet channel and a reliable trading platform that will allow him to get instant information about prices.
Reliable strategy: scalping requires a reliable strategy that allows you to make fast trades based on analysis of technical and fundamental data. A scalper must have a strategy which allows him to react quickly to price movements.
Good risk control: Because a scalper makes many trades in a short period of time, he must have good risk control in order to avoid big losses. A scalper should determine stop-loss and profit levels for each trade to minimize risk and maximize profit.
Discipline: Scalping requires a high degree of discipline and concentration, because scalper has to make quick decisions and react to price changes. Scalper should have a trading plan and stick to it to avoid emotional decisions.
Stress tolerance: Scalping is a high risk strategy which requires a high degree of stress tolerance. Scalper should be prepared for fast price movements and unexpected events in the market not to lose his capital.