Stock market scalping

Stock market scalping

Contents of this article:

Trading is the main type of income in the stock and cryptocurrency markets. Traders earn on the difference in the exchange rate, their main task is to buy an asset cheaper and sell more expensive. There are many trading strategies , each with advantages and disadvantages. We will look at scalping in the stock market, its types and the basic rules for successful trading.

Scalping in the stock market: what is it?

Scalping is an active intraday trading strategy, where a trader takes profits with a slight increase or decrease in the asset price. A trade may only last a few seconds or minutes, and the profit from it is usually small. But high-frequency trading allows scalpers to earn money , which consists in opening a large number of short-term transactions within one trading session.

The basics of the scalping strategy in the stock market are simple: when the rate rises by several position points, the asset is immediately sold, taking profits. At the same time, experienced traders do not open positions just like that, trying to guess the further dynamics of the course, they use indicators and several types of analysis. And for making money on short-term transactions, they choose highly liquid assets with high volatility, since it is their rate that can often change during the day.

Scalping in the stock market is considered a psychologically intense type of trading, which requires the trader to concentrate, self-discipline, the ability to work with indicators and analytical data. A trader who understands the peculiarities of the market can earn scalping both on the rise and fall of the asset price.

Basic scalping methods

scalping strategies in the stock market , new methods of earning are constantly appearing. The main ones that are especially popular among traders are:

  • According to the stock glass. The analysis of the order book, which contains data on orders opened on the market, is most suitable for trading securities and futures.

  • Pulse. This type of trading is often used to trade stock index futures. A high-profile political event, natural disasters, news from the economic sphere, especially when it is news from the world’s largest economies, can serve as an impulse.

  • Mixed. By choosing this option, the scalper is based on an assessment of the current liquidity of the asset, but also does not forget to take into account the fundamental factors that affect the price of stocks, cryptocurrencies and other assets.

Separately, you can highlight trading on indicators, algorithms that help the scalper to assess the situation on the market. There are many indicators, and each of them needs to be analyzed separately, trying to use it in practice. For example, scalping for 5 minutes on the stock market allows you to use a large leverage, and the profitability from one transaction can reach 7-10% of the deposit.

Simple rules for profitable scalping

Scalping trading strategies in the stock market are considered aggressive compared to many other trading styles, as transactions are made very quickly, the trader has a minimum of time for analysis. Even professional scalpers make mistakes and cannot close 100% of orders successfully. But in order for the percentage of profitable trades to exceed the percentage of failures, it is necessary to study, analyze and practice each strategy in detail in order to choose the right one.

And you should also follow a few scalping rules :

  • choose assets with high liquidity and volatility;

  • analyze the trend and the main market trends before the start of the trading session;

  • do not neglect risk management and limit losses by placing stop losses ;

  • fix even the minimum profit;

  • conclude the maximum possible number of transactions during the trading day;

  • look for another asset if the dynamics of the current one has slowed down.

Learn how to effectively use scalping strategies on the Crypto course Crew ! Studying with us, you will learn how much you can earn with scalping in the stock market, how to use indicators correctly, how to manage risks and trade an asset safely for a deposit.