What is scalping? Scalping trades

In this article, we are going to talk a little about scalping trading strategy. This type of scalping trades are done during the day, the trader’s goal is to get a small profit. People who use this method are mostly looking for small profits in the market, while respecting the profit and loss ratio. Basically, the scalping trading strategy is a type of trading strategy in which a trader benefits from small changes in the price of digital currency in a short period of time. In this way you have a guaranteed profit even if the bid price does not change unless some traders are interested in taking market prices. Its function is to convert a share into cash without affecting the actual market price. Also note that scalping trades are generally done when a large amount of capital is involved.

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What is scalping?

Scalping trading is a type of trading strategy in which the trader looks for a very small profit, in the range of a few percent, during the day. The main goal of a scalper is to make small profits in the digital currency market and hence there are many strategies that you can use for scalping.

Advantages and disadvantages of scalping trading strategy

By using this method, you can bring high profits in your transactions and reduce possible losses in your transactions.

Advantages of scalping trades

1. People who are not interested in long-term holding of their digital assets can trade during the day using this method.
2. Beginners can use this method after learning scalping and swinging to get small profits with minimal risk.
3. As we said, because the time of scalping transactions is short, it has less risk.

Disadvantages of scalping trades

1. This method is not recommended for people who have very low math skills and low speed of operation, and if they use this method, they may face failure.
2. Also, this strategy is very important because you have to check the prices in real time.

Read more: What is Forex strategy?

Important points in scalping

Therefore, to achieve success in any strategy you want, you must learn all the points related to it in order to obtain a profitable path by collecting knowledge. Also, scalping transactions are also related to the same topic, which you should know the basic points of. Keep in mind that the scalping trading strategy is not suitable for newbies and may cause you to lose your assets if you don’t have enough information.

1. Scalping transactions in the digital currency market are created by making small and numerous transactions; Because in trading markets, the less price movements you have, the easier it is to predict and guess them.
2. A scalper (a person who uses the scalping method) knows that the performance of the scalping trading strategy is based on small and successive profits, for example, buying and selling a token with an approximate profit of 0.009% compared to buying and selling a currency with a jump. The price is easier.
3.  Also, the use of this method is very easy to predict or stability in the market. The reason is that the price changes in digital currencies are very slow and small, and from this you can bring continuous transactions with small profits.
4. One of the advantages of scalping trades is that due to the small trades, the investment risk and benefit are equally low.

Types of scalping strategies

We will mention some digital currency strategy methods that can be profitable by scalping method.

Scalp trading using stochastic indicator

This stochastic indicator determines the momentum of price movement. The momentum situation always changes before the price itself. To understand this issue, we give an example; Suppose a rocket is launched into the air. In order for this missile to stop, it must shut down or slow down. Scalping uses the stochastic indicator to detect movements in the market trend. This indicator shows the current price position relative to the recent time range. In general, the main purpose of stochastic is to compare the current price with the recent prices so that it can determine the reversal points of the chart. It is better to know that downward or upward movements are also detected by this method. Usually, the stochastic indicator consists of two lines, K and D, which fluctuate between 0 and 100 levels.

1. K Line: Using this line you can specify the stochastic value of each period and it also fluctuates as a fast line on the stochastic chart.
2. Line D: This line shows you the percentage of the slow indicator and hence traders follow it because they know that this line represents important signals.

The main difference between these two fast and slow lines is their sensitivity. The K line is more sensitive to price changes than the D line, and the same lifetime causes it to produce more trading signals.

Read more: Best trend detection indicators

Scalp trading using parabolic indicator

All indicators are the results of mathematical calculations that try to predict the future price of tokens by means of these functions. Another widely used indicator of digital currency markets is the parabolic indicator. It is placed in the form of dots above and below the price chart. Therefore, traders use this indicator to detect an upward or downward trend. In the following, we will explain parabolic buy and sell signals for scalping training.

1. Buy Signal SAR: When the price closes above the parabolic SAR, a buy position is provided for traders. If the SAR parabolic location shifts from the top of the price to the bottom of the candle, the trader has the ability to close his sell positions.
2. SAR Sell Signal: A sell signal is issued when the price closes below the parabolic SAR. This is how it will change its location from the bottom of the price to the top of the price.

Conclusion

What is scalping? It was a question that we addressed in this article, which is known as a trading strategy. Its function is that the trader looks for small or partial profits during the day. Also note that this method is not recommended for beginners; Because people who intend to use this method must have high mathematical skills.