Contents of this article:
Scalping is one of the most common trading methods in financial markets, including cryptocurrency . Scalpers use different trading strategies for profitable digital assets. We will talk about scalping by order book, the features and essence of this type of trading .
Exchange Order Book: What is it and What Does it Consist of?
Before understanding what is DOM scalping , you need to understand how the DOM works. So, an exchange glass or a glass of orders is a list of all current positions for selling and buying cryptocurrency . It contains data on the price of the cryptocurrency and its quantity. Seeing this data, a trader can analyze the volume of trading on the exchange, the level of supply and demand, the liquidity of the asset in order to decide when and what position to open.
Working with a glass of orders, the exchange player must determine the right moment to open a transaction in order to profit from it. It is important to understand that the glass does not display the data of the entire market, it only shows a list of orders created by traders on the exchange.
The order book receives orders from the so-called active and passive traders. Active ones open positions at the current rate of the asset, passive ones set the desired price and open deals only after it is reached. If we are talking about scalpers , then these are not only traders, but also trading robots that create a large number of orders in a minimum period of time.
The essence of the DOM scalping strategy
Scalping trading in a glass requires a high concentration of attention from a trader, self-discipline and the ability to instantly respond to an increase or decrease in the asset price. A trader should carefully monitor the glass of orders, watch all large positions. Having chosen the DOM scalping tactic , the player hunts for the trend, opening many short-term trades, closing them quickly. During the trading session, he must open the maximum possible number of positions, holding them for several seconds or minutes.
Characteristic features of the DOM scalping strategy :
high-frequency trading , the maximum number of transactions within one trading day (positions cannot be left for the next trading session);
short holding of a position;
transactions for small amounts;
profit from a slight change in the exchange rate (by several points);
DOM scalping tactics
Traders use DOM scalping in the futures and spot markets, using this strategy, they trade cryptocurrencies or securities. This type of trading is widespread in the financial markets, in fact it is a classic speculation with an important feature – the trader is interested in instant profit, transactions are made here and now. Analyzing the order book, scalpers find a favorable moment to enter the market and exit it, having received the maximum possible profit.
Trading tactics by the order book:
Precise control of the list of orders. From a technical point of view, it is difficult to analyze the dynamics of the order book, so the trader relies more on intuition.
Use of market indicators. Despite the minimum duration of the transaction and almost no time for analysis, many professional traders do not neglect the charts and actively use special indicators.
Small profit from the transaction, but a large number of open positions. A trader opens transactions for small amounts, receiving an insignificant profit from each of them, but in total for a trading session he can make good money.
Instant exit from a failed trade. If a trader sees that an open position will not bring the expected profit, he closes it immediately in order to open a more profitable one.
learn DOM scalping , because this trading method will not bring success without the ability to identify and see the trend movement, as well as analyze the state of the market. Crypto Traders Crew teach beginners scalping by glass and other trading strategies on the stock exchange. We have created an effective course that in just a month will help you make significant progress in cryptocurrency trading , gain basic skills and start making money on your own.