Scalping is a trading style in which traders profit with every small change or fluctuation in stock prices.
Scalpers take advantage of intraday fluctuations in stock prices and instruments. Those who trade with this technique tend to play in parallel with momentum and may also be called “price action traders.” In scalping, the important things are the exact time and speed of trades. This method uses leverage to a large extent, so scalping is considered a high-risk trading style.
Scalpers mainly make decisions based on:
· The nature of price movement
· Prevailing sentiment
· Overall direction of the benchmark index
· News flow
· Technical indicators such as MACD, RSI, Bollinger Bands and others
· Support and resistance levels, etc.
As with any other trading style, there are many different methods for applying scalping. The most famous of these is the use of market time and sales to determine when and where it is best to make trades.
Some of these Forex techniques are similar to others, because they often include charts of bars or candles. According to them, traders determine the best deals based on price models, support and resistance signals and signals of technical indicators.
The scalp chart timeframes and the time during which each trade is active are the shortest of all trading styles. For example, a day trading trader can use a five-minute chart and make four or five such trades per day, and each of them can be active for thirty minutes.
The scalper, in turn, uses a five-second chart where each price bar represents only five seconds of trading. It can perform from 20 to 100 or more operations per day, where each of them is active for several seconds or minutes.
If you decide to try scalping, then for a start you can work through a trading simulator. Especially until you learn how to get a stable profit from this and stop making initial mistakes. For example, do not exit your trades when they move against you. Many traders call this technique the opportunity to gain serious experience and master the forex financial market.
At first, scalping may seem quite simple, because the trader makes a profit for the whole day in a few minutes. However, in fact, scalping is a complex and risky type of trading. It is necessary to be extremely attentive, stress-resistant, able to analyze and adjust.
