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Scalping is called an aggressive way to make money on the cryptocurrency exchange. This is one of the most difficult types of trading , requiring attentiveness, quick reaction and self-discipline. Scalpers trades are limited in time, which makes this style of trading profitable and risky, since the trader has practically no time to think. Let’s understand what scalping is on the stock exchange cryptocurrencies , what types of scalping exist.
Scalping on the stock exchange: what is it in simple words
Translated from English, ” scalping ” on the stock exchange means “cut off the top.” The essence of this style of trading is the ability to profit from a slight change in the rate. The task of a trader is to open positions for small amounts, quickly respond to minor changes in the rate and close the deal, making a small profit. Having successfully closed many small transactions, a trader can make good 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 conditional example that does not take into account losses, because few people can close 100% of transactions without losses.
In simple words, scalping on the stock exchange is the closing of a large number of short-term positions that are held from a few seconds to several minutes. In the process of scalping, traders use tick or minute charts, make deals within one trading day, leaving no open positions for the next session.
Types of scalping on the stock exchange
There are different trading strategies, but before studying them, a trader should understand the types of scalping on the stock exchange . Three main types of this style of trading can be distinguished by the duration of holding a position:
1. Pipsing . This is a slang name for a type of crypto trading , derived from the English phrase ” percent in point “. Translated, it means “points”. The task of a trader is to open as many short-term trades as possible and close positions, making a profit of several points. Usually positions are held for only a few seconds, a maximum of a minute. A feature of this type is the lack of time for calculations, positions are closed almost instantly, and the trader does not have the opportunity to analyze. This is the danger of the method, without a clear understanding of the market and a plan of action, the trader risks losing the deposit.
2. Medium or classic. Medium-term scalping on the stock exchange is a less risky method, because a transaction can hold from 5 to 10 minutes. The trader has time to think and the opportunity to use indicators.
3. 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 when using this type of trading are lower, but the speed of trading slows down, which means that the potential income decreases.
Recommendations for scalping on exchanges
Scalping on the stock exchange is a rather stressful type of trading, in which a trader needs to learn how to make decisions as quickly as possible, while being guided not by emotions, but by numbers. To achieve success in this type of trading and reduce risks, follow a few recommendations:
Never open trades for the 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 optimal scalping strategy for yourself and have gained basic experience.
Whenever 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 emotions. After closing an unsuccessful deal, do not rush to raise rates in order to recoup.
Do not leave open positions for the next trading session.
Always stay up to date with the latest crypto industry news , follow the market trends.
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