06.12. scalping

Scalping is a trading strategy that attempts to make profits on small price changes. Traders who implement this strategy place anywhere from 10 to a couple hundred trades in a single day in the belief those small moves in price are easier to catch than large ones; traders who implement this strategy are known as scalpers. Many small profits can easily compound into large gains if a strict exit strategy is used to prevent large losses.

Scalping is just so popular because it is structured in such a way that encourages an aggressive approach with having to risk some heavy losses. However, there is a possibility that it can even yield some bigger profits in the long run. Even though scalping may be ideal for novice traders, it is important to understand that it is not meant for traders who make trades without a careful analysis of the market.

In addition, scalping will require a total attention to the market by the trader. By this, we mean that traders must understand the peak trading hours of the day and also understand how the market is changing with every single trade they make. This then means that scalping is a strategy that will require adequate amount of time. Therefore, traders who intend to trade for just a couple of hours should better stay away from scalping.

Let it be clear that this strategy is not just for everyone. It involves the trader having some specific type of skills and also a good amount of discipline by the trader if profit is to be made. It is better to adopt the scalping strategy once you have had some level of experience in trading instead of just jumping into it as a trading newbie. The truth is that without a considerable level of experience, there is every possibility of ending up with a big loss during trading.


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