Kinds of trading. Scalping
This type of trading is already suitable for living people. In scalping, transactions take several seconds, sometimes several minutes. Scalpers (traders who are engaged in scalping) are traders on the grain-by-grain principle.
It’s doubtful scalpers will be content to spend their days selling auto parts or typing in a cramped office space. Hard-core scalpers love to battle the market and other professionals in awe, day in and day out. Their strategy consists of a large number of small trades.
As a result, the day should close with a positive result.
Scalpers catch small impulses caused by various factors. If you love the sensations during extreme situations, then scalping is right for you. The adrenaline rush from fast trading is an important factor in the decision to make a living scalping.
As a rule, the scalper’s workspace (a real example is in the picture below) is occupied by print ribbon modules, various variations of order books and cluster charts with a timeframe from 1 second to 3–5 minutes.
Scalping is interesting for newbie traders because frequent execution of trades helps:
quickly gain experience;
intensively study the market mechanics and chart patterns; train the psychology of a trader.
Benefits:
a large initial deposit is not needed, for scalping capital of $ 100–200 is enough;
multiple turnover of working capital gives the potential to increase the deposit;
comparatively simple preparation of a trading plan,
since scalping formations are not considered complex;
many trading signals during the day, even in one market;
there is no risk of transferring the transaction every other day;
Disadvantages:
grueling trading style. Sitting for hours at the monitors, concentrating on the progress of trades in order to catch the very right moment to enter the deal — the load is not easy.
Also, every transaction requires attention to be accompanied. Therefore, scalpers usually trade sample periods — for example, 1–2 hours after the opening of each session;
focusing on small timeframes, you can overlook the influence of higher timeframes;
high costs caused by frequent trades.
Often, the profit from a trade is comparable to the size of the commission paid. Therefore, the percentage of successful transactions in scalping strategies should be significant;
increased requirements for equipment, connection speed;
working with a scalper becomes more difficult with age.
Thank you for reading!
