Scalping is one of the quick way of placing our trades in forex, stocks, metal, crpytocurrency etc. Scalping is a trading style in which a trader just try to get a few amount of pips within a very short term time frame.We just try to catch a smaller price movement(5 to 10 pips) to earn profit from the market Mostly trader’s does use Minute 5, Minute 15, Minute 30, and 1 hour chart time frame for the scalping. Hence scalping can be done in so many ways and there are so many time frames in Meta trader 4 software or in any other trading software where scalping can be done as well. Pips target would depend upon market condition as well some times it can be 15 to 20 pips as well, its also depend upon our risk size as well which also determine that when we have to exit from the market with our profit or loss.
A part of it any type of financial instrument trader has a short term goal in scalping trading strategy, it is a short time based trading strategy and there are so many ways to use strategies in it, we can use a lot of indicators, we can apply scalping on naked chart, even we can perform scalping just on the bases of support and resistance theory which is Demand and Supply zones.
In this topic we are gonna talk about a few of powerful trading strategies, we would like to share our personal trading experience based on these strategies wth you. Along with it we would discuss scalping advantages and disadvantages in this topic. Lets start with the Characteristics
Characteristics Of Scalping Trading Strategy?
Scalping trading strategy is based on short term based target and its a very good choice for those trader’s who have a lot of time for trading and want to build a powerful short term based trading strategy for them. A full time trader can adopt this trading strategy hence a lot of time required every day to deal nicely with this strategy in forex, stock etc. Due to the short term based method you have to search for trading opportunities again and again.
A good trading skill in scalping can generate a lot of profit in a very short term time, we are talking about 1,2 years here but in starting its not very easy to earn money from the scalping trading strategy, about it we will discuss later because there are so many psychological barriers those can create some hurdles in our trading success.
Time frame selection depend upon a trader here, he or she has a very good relaxation to shift from one time frame to another time frame means to say that you can select couple of short term time frames and can start to do trade in all. You don’t have to wait a lot for the trading strategies they will appear very quickly in those short term time frames for you. During the use of scalping trading method we can also shift our currency pairs or stocks very quickly within a very short term time frame which creates a very good flexibility in our trading.
Scalping also gives a lot of help you deal with your trading emotion, because as we know that most of time we see everywhere in this industry that experience is the key of success in any financial market and as much as experience you would get here with your emotions, strategies, management much better result your will able to get in trading and scalping trading method does provide that platform to you where you learn in a quick way.
There are some advantages as well as disadvantages of Scalping trading method for traders. Scalping trading method is good for many traders but some trader’s also does feel good when they starts to think about scalping trading strategy lets start with the advantage.
- A trader can get an good amount of trading experience in a very fast way form the method of scalping. Because we have to deal with so many transactions every day in financial market with the strategy called scalping trading.
- The other great benefit is that you can get your profit very quickly from the scalping trading hence a good amount of experience required on the based of this strategy otherwise you can lose as well.
- It also helps traders to find so many new styles of trading niches for them, during spending a lot of time on our charts we can surely find out something great and new in our trading. As we know that every day is a new day in financial market and trading with scalping can make it more wonderful for traders.
- Scalping can be done in any time frame its not necessary to do trade any fix time frame when you are dealing with scalping trading strategy, there are so many differ time frames in mt4 those you can follow to place your trades any time.
- The other handsome benefit of scalping trading method is that it gives you a lot of flexibility in trading for example in long term time frame you have to sit for so many days for getting your profit but here you can earn profit within couple of days and week. So there is a flexibility regarding getting your profit here.
- Scalping can be done in trending market as well as in non trending markets. Here you don’t have to wait for any specific movement like uptrend and downtrend, its depend upon your scalping trading method that when you have to enter and exit and you can perform with it in both directions.
As we know that whatever is there it has both advantage and disadvantage and scalping trading method has also some disadvantages they are as follows:
- It requires a lot of time to do trade with scalping trading method, we have to place a lot of trades every day and a long time required every day to sit in front of your computer to do that which consume more time for trading. There are some traders who don’t have much time for trading so they prefer long term time rather than this short term trading method.
- Whenever we use scalping trading method we go against the trend as well, look here i am not against anyone this is just for those who don’t like to do trade against trade and if you like to do scalping for sure you can but there are a lot of traders who believe that trend is our friend and following trend is a good thing which is an uinversal truth as well.
- Trading with scalping would bring more emotion in your trading, because as much as trading you will do more fear and emotion would come to your mind. On the other hand whenever you follow long term trading chart you just follow a few trades in a month or 2,3 months which gives less emotion in trading.
- Trading wrongly with scalping trading method would bring quick losses as well, upside we had discussed that how scalping trading method can give you a quick profit but if you don’t know how to perform with it or if you are new in trading then you can lose money in quick way as well.
- Scalping trading is not good for those who have any kind of problem with their back, neck, eyes etc. Due to a lot of sitting you would hurt yourself more so we would sugggest you to go with long term trading in this case.
Most of new trader’s believe that trading with scalping is very easy and its easy to make money with scalping which is not right actually, Trading with scalping required a long years of trading experience which includes a good management, a good strategy, and the most important a good trading psychology. If you don’t have all these you would not be able to do successful trading.
Now you must be thinking that these three are necessary in financial market?
Yes i am also agree with that but you know I am talking about the starting phase here, whenever a new trader jump intro in this market he doesn’t had the idea that which type of trading style he or she should choose mostly they got attracted to short term trading and they starts to play with scalping in their account.
A novice trader always feel excited about the money, this is a very common problem and every trader face this whenever they are new here. This is the time when we need a good decision in our trading, we should go with a proper trading plan. But we ignore it and try to gain profit very quickly which produce on loss at the end.
I would suggest new traders to always go with a long term trading in financial market, test your trading niche, test your trading skill and find out the result of your trading strategy. Even if you want to do trade in short term time frames you can do it but then you need a very good control on your Risk management and Money Management.
I am not against the scalping trading strategy, its good but only once you have a good skill and experience and I would like to suggest you to go with boosting your trading experience, skill or knowledge first. I hope this article would give you a lot of help to understand the term Scalping. Furthermore if you have any doubts you can put your comment below. I would glad to help you.