Scalping strategies
Scalping is known as an aggressive way of making money on cryptocurrency exchanges. This is one of the most difficult types of trading that requires concentration, quick reflexes and self-discipline. Scalping is limited in time, which makes this trading style both profitable and risky, as traders have little time to think. Let’s understand what scalping is on cryptocurrency exchanges and what types of scalping exist.
Stock exchange scalping: what it is in simple words
Translated from English, “scalping” on the stock exchange means “to cut off the top”. The essence of this trading style is the ability to make a profit from a small change in the exchange rate. The task of the trader is to open positions for small amounts, quickly react to minor changes in the exchange rate and close the transaction, receiving a small profit. Having successfully closed many small transactions, a trader can make a good amount of money in a day.
For example, in one trading day, a trader can open 40 trades, earning $10 on each of them. In this case, he will earn $400 per day. This is a hypothetical example that does not take into account losses, because few people can close 100% of trades without losses.
Simply put, scalping on the stock exchange is closing a large number of short-term positions held from a few seconds to a few minutes. In the process of scalping, traders use tick or minute charts, make deals within one trading day without leaving open positions for the next session.
Types of scalping on the stock exchange
There are various trading strategies, but before studying them, traders should understand the types of scalping on the stock exchange. According to the duration of holding a position, there are three main types of this trading style:
Pipsing. This is a slang name for a type of crypto trading that comes from the English phrase “percent in point”. It means “points”. The trader’s task is to open as many short-term trades as possible and close positions with a profit of several pips. Usually, positions are held for only a few seconds, a minute at most. The peculiarity of this type is that there is no time for calculations, positions are closed almost instantly, and the trader has no opportunity to analyze them. This is the danger of the method: without a clear understanding of the market and a plan of action, a trader risks losing his deposit.
Medium-term or classic. Medium-term scalping on the stock exchange is a less risky method, as a trade can be held for 5 to 10 minutes. The trader has time to think and the opportunity to use indicators.
Conservative. A position with this type of trading can be held for up to half an hour, so the trader has time for a quick analysis. The risks of losses are lower when using this type of trading, but the trading speed is slower, which means that the potential income is reduced.
Recommendations for scalping on exchanges
Scalping on the stock exchange is a rather stressful type of trading, in which a trader needs to learn to make decisions as quickly as possible, while being guided not by emotions but by numbers. To succeed in this type of trading and reduce risks, follow a few recommendations:
Never open trades with your entire deposit. The amount of one position should be only a few percent of the deposit.
Choose assets and trading pairs with high volatility.
Do not rush to use leverage until you have chosen the best scalping strategy for yourself and gained basic experience.
If possible, use trading robots designed specifically for high-frequency trading.
Choose exchanges with low fees and high liquidity.
Learn trading indicators and use them.
Control your emotions. After closing an unsuccessful trade, don’t rush to raise your bets to get even.
Do not leave open positions for the next trading session.
Always keep up to date with the latest news in the crypto industry and follow market trends.
A course from SmartMaker will help you to understand better what scalping on the stock exchange means and learn how to make money. We have created an effective training program for beginners and know how to start earning money from scalping with even a small initial deposit.
