Scalping uses larger position sizes to obtain lower price gains in the shortest waiting period. The main objective is to buy or sell several shares at the buy or sell price and then quickly sell them for a few cents or so to make a profit. Newcomers to scalping should ensure that the trading style fits their personality, as it requires a disciplined approach. Your biggest profits during the trading day will be realized when the scalps align with the support and resistance levels on the 15- or 60-minute or daily charts.
Scalping is a style of trading that specializes in taking advantage of small changes in prices and making quick profits by reselling. Speculators prefer technical analysis to fundamental analysis to examine past movements in a stock's price. Those who are impatient and satisfied when choosing small successful trades are perfect for scalping. Since the barriers to entry to the trading world are low, the number of people trying intraday trading and other strategies, including scalping, has increased.
The profit of each transaction is based only on a few beeps (basis points), so scalping is usually done when there are large amounts of capital and high leverage, or when there are currency pairs where the differential between supply and supply is tight. Speculators don't have to follow basic fundamentals either because they don't play a major role when faced with a very short period of time. Detecting the trend and momentum is useful for a scalper, who can even enter and exit briefly to repeat a pattern. But you need to define your scalping strategy very precisely to be able to test it with historical data.
Although scalping sacrifices the size of winning trades, it greatly increases the ratio between winning and losing trades. The second type of speculation is done by buying a large number of shares that are sold for profit with a very small price movement. Some resellers place dozens or hundreds of trades a day; this strategy can be time-consuming and require high levels of concentration. Any retrospective test based on short-term data is unlikely to reflect reality when you start scalping with real money.
You can use your scalp depending on support and resistance, Bollinger bands, volume, news and, for example, indicators. Scalping requires the trader to have a strict exit strategy, as a big loss could wipe out the many small profits the trader strove to make.
