Scalping Strategy

1. ScalpingStrategy Technology and the internet come together to make trading easily accessible and convenientenoughforeveryone.Tradersarewidelygettingexposureto varioustrading strategiesbecause of theinternet.Theideatoinvestin various assetclassestodiversify theinvestmentportfolio isquitepopularamongtraders.There are several strategies to cashoutfrominvestingin multipleinstruments.One of themisscalping. In terms of scalping,seasonedtraderssuggestBrokereoasthebestbroker asitoffers daytradingatminimumcosts,includingtax.In addition,itisa reputedbroker known for providingthe besttradingconditionstoitsclients. Scalpingisattractinga newageoftradersbecauseof severalreasons.Mosttradersuse scalping strategytogenerate regularincome bytrading. WhatisScalping? Scalping refers to thetradingstyle in whichtraders are focusedtogainon the small pricechangeof an asset.Traderswho conductsuch astrategy arecalledscalpers. Scalpers usually place multiple trades in a day to maximise their chances of profit. For example, one can makeafast profitby resellingthe asset inminimumtime. Thisstrategy canbeappliedinvarious markets such asstocks,cryptocurrencies,Forex, commodities andmore.Scalpersbelievethatsmall changesin priceare quite easyto identifyrather thanthe larger ones.Thus,a largenumberof profitscanaddup to make

2. a massive gain.Butitcanonlybedonebyapplyingthesimplestrategyof exitthe position attherighttime.There areseveral exitstrategies to mitigatelossesonecan execute. • Scalpinginvolvesstricttradingconditionsin terms of both timeframeandprice movements.Therefore,theuseof technicalindicatorsisessential to makeaprofit throughscalping strategy. • HowDoesScalpingStrategy Work? • Scalping,meaningtradingwithproper implementation ofanexitstrategy,isessentialin scalpingbecause one largelosscouldshadowallsmall gains.The ideahere isnotto gain the most from each trade but to make the most out of the large volume of trades. Tosuccessfully implementthisstrategy,oneshouldknow how toexecute technical analysis,candlestickchartsandother technicalindicators.Scalpingisimplemented intraday. • Itisassumedthatthesharescompletethefirststage of theprice movementinscalping stocks.Butafterthis,thejourneyisquiteuncertain.You do notknowwhereitwill go after thecompletion ofthefirststage.Thescalpingishardenough to maintain your constantgainsthroughoutyour tradingjourney.Moreover,itinvolveshigher risks because onesignificantlosscan swipeyourseveralconsiderable gains. • Butscalpersbelievethatrelyingonsmallpricemovementislessrisky thandependingon thelargepriceshift.Thisisbecausescalpinginvolvestradingin quicksuccession throughoutthetradingday,andscalp tradersusually waitfortherighttime to emerge the sweettradingopportunitytomakea large profit. • Scalpersputahugeemphasisontechnicalanalysiswhileimplementingthisstrategy.Of course,fundamentalanalysisisalsocrucialfortraders to enterintothegameof scalping. Buttheyheavilyrelyontechnicalanalysisbecause of theinvolvementofcandlestick charts, moving averagesand more. • ScalpingStrategy • First,marketanalysisisamustif you are lookingfor higherreturnsthrough this tradingstyle.Athorough marketanalysisisrequiredthatcanbetechnical analysisor fundamental analysis.Scalpers usecharts andtrendsignalsto identifythetradingevents andcarefully watchthe potential entry andexit points. • Oncetheyknowthepatterns,they usethemtopredictwhatthepricewouldbeinthe next minute orwhere itwillmove. • One mustgothrough theprocess of analysingcharts andpastprice movements toget a rough ideaaboutthe pricedirection and trade accordingly.Themain thingis the disciplineinscalping.A scalp tradershould be emotionallystable and take decisions byreflectingonthem. It needs

3. enough patience to find that big opportunity to cash out across the trading day. • The trading journey of a scalper gets exciting enough when s/he pays attention to every detail of price movements. But, at the same time, scalpers must also be flexiblebecause of themarket’s liquidity. • Other strategiesarehighly technical andrequireenough knowledge and • decenttradingexperience.For example,seasonedtradersusethese technical indicators for larger volumes of trade. Butscalpingismoreprevalentamong beginners andintermediatetradersasonecaneasily participateinthemarket withless capital. • Onecanbuildanalyticalprowessby applyingthescalpingstrategiesmentionedbelow. • StochasticOscillator strategy • Stochastic oscillator strategy isusedto comparethetentative rangeof assetpricewith the currentprice. The stochasticoscillatoris also knownasa momentumoscillator. • Scalperscanquicklyidentify themovesin markettrendswiththehelpmomentum oscillator. It gives youa value betweenzerotohundred. • RSIstrategy • RSImeans RelativeStrength Index.Itisalso aformof oscillator.Therefore,scalperscan depend on itto analysethe suitable entry andexitpoints and marketpatterns.Thebest thingaboutRSIis that itoffers multipletimeframes. • Whenthevalue shownby RSIisclose to 30and still increasing,itmeans thatyou have to openalongposition.Ifthevalueisaround70andthen falls,itisa clearindication to shortyourposition.Thisscalping strategy isusedoften inthebear markettoo. • Movingaveragescalpingstrategy • Movingaveragesareoneof theessential indicatorsfor scalpers.Thereare basicallytwo typesofmovingaverages.Oneis a short-termmovingaverage, andtheother oneisa long-termmoving average. Scalpers typicallyuse one longtermmoving averageand twoshortterm-termmoving averages. • ParabolicSARindicatorstrategy • SARmeans StopandReversal.Onecaneasilypredict theentry and exitpoints using Parabolic SAR.Thisindicator offersthedirection of themarkettrendsin asubtlemanner. Stopandreversalsignify the dotsplacedagainstthepricebars.Whenthe assetprice rises,the dots also tendtomoveupwards. • If you seedots belowthe pricebars,itistheindicationto opena longposition.Itclearly meansthatthe market is currently bullish. • DayTradingvsScalping

4. Day tradingandscalpingseemquitesimilar toeach other.Buttheyareverydifferent trading styles. Scalping is a part of day trading, but all forms of day trading are not scalping. In day trading, one doesn’t need to use the scalping strategy. The major difference betweenintradayandscalpingisthe timedifference of holdingtheposition. Inintraday,traderscanholdpositions aslongasthe marketisopen ona particular tradingday.Butscalpersoftenholdpositionsonlyfor secondsto cashouton thehigh variationinasset’sprices.Daytradersusuallyapply systemicanddiscretionarytrading strategies.On theotherhand,scalpersuse automated systematic tradingscalping strategy.Thetimeframe ofscalpersisgenerallymeasuredinseconds. Traders identifyentrypositions in the marketforalargerprofitinday trading,butin scalping,theyenterthemarketintendingto make a largenumberofsmallgains. Therearemanypositionsthatlastonlyforsecondsorminutesinscalping.Itisoneof theshortesttermtradingstyles.Onehastobeveryclear withthegoalsof makinga profitinscalping.Oncethepredefinedprofitorlosshasbeen touched,youhaveto close yourposition.There isnoplace forgreedin scalping,unlikeothertradingstrategies. Tradersrequirehighdisciplineastheywantto adaptscalping. ProsandConsofScalping ContinueReading…………….