Scalping: risks and principle of operation
What is scalping ?
Scalping is short-term or intraday trading. Conducts short-term transactions and withdraws relatively small finances. Which in their entirety create the desired percentage of profitability. In other words, this is a set of strategies that are designed to quickly open, conduct and close transactions.
Scalping is quite a difficult and fastidious activity. Even for people who have been trading cryptocurrency for a long time, such an occupation is by no means one of the easiest. It is impossible to say exactly how many scalpers spend on this activity. It all depends on many reasons. Someone spends a whole day on it, and for someone a couple of hours a day is enough for a good result.
Scalping in cryptocurrency trading
The trader guesses the market movement. Based on whether he is a seller or a buyer, he opens with pre-set stop loss and take profit orders. Take profit is an application that was left to fix income. When the price reaches the desired value, the transaction is automatically closed. Stop loss, on the contrary, closes the transaction when the loss reaches any particular level of loss. At the moment, the most promising option is markets with great variability. Due to the commission, most of the markets conclude transactions on the futures and foreign exchange market. As for the stock market, scalping can be found much less often on it. Due to the mandatory payment of depository services.
There are a few more options. For example, trading in certain periods of time. Or in a special price direction.
Risks
Quite complex tasks and high requirements for users. This significantly reduces the chances of a good profit. In many expert recommendations, the amounts are mostly overstated. Before you enter them, you should think carefully. First of all, you need to understand that you will win if the market is in a good mood. You have a chance to acquire this money, but there is exactly the same chance of losing it. After all, the market is not a very stable phenomenon.
However, in the scalping method, there are more chances to work on post-seasonal market changes. Since transactions are carried out quickly, this method can be quite effective. But first of all, do not forget the instability and lack of guarantees.
