Scalping the Market
Scalping is a well-known style of trading for many years especially among day traders.
Scalping is a trading strategy when traders enter and exit a trade extremely quick for relatively small moves.
Hence, profits for each trade will be small.
Simple stated, scalping is attempts to trade securities (usually future contract or forex) for only few ticks or pips.
The scalping strategy takes advantage of fairly narrow trading ranges in order to "buy the bid and sell the ask".
Traders who use this technique in trading are called "scalper".
Scalpers, who are categorized as day traders, do not only seek to trade within daily time frame.
They also attempt to gain profits on the most minute during trading hours.
Since the scalpers make profit from only few ticks, they will need to trade large positions, take small moves out of the market and do so many times each day to gain significant profits.
In addition, it is your job to identify the market which suitable for scalping.
Ideally, the market should be in sideways when you do scalping trading.
Scalping Techniques There are many techniques in trading that lends themselves readily for scalpers.
I will not provide you with details for each technique in this article.
I will just give you some clues how they can be used for scalping.
Here they are.
Moving Average Channel (MAC): The idea of using MAC is to buy the low of the channel and sell the high of the channel in sideways trending markets.
Point and Figure Chart: The point-and-figure-chart can be used to determine support and resistance level.
The technique is to buy at support and sell at resistance.
The key to select indicators or techniques to be used in scalping is they must be able to isolate a specific trading range which clearly defined as in term of support and resistance.
In conclusion the goals for scalping are as follows.
1.
Trade as often as possible to accumulate each small profit from each trade by taking advantage of small but reliable moves during trading hours.
2.
Do not hold positions for long period, try to exit quickly either at a profit or at loss However, scalping is not allowed in some markets or brokers.
A clear example is in forex trading, some brokers do not allow traders to do scalping.
Some forex brokers allow scalping but traders need to open a specific type of account to be able to do scalping.
Scalping is a trading strategy when traders enter and exit a trade extremely quick for relatively small moves.
Hence, profits for each trade will be small.
Simple stated, scalping is attempts to trade securities (usually future contract or forex) for only few ticks or pips.
The scalping strategy takes advantage of fairly narrow trading ranges in order to "buy the bid and sell the ask".
Traders who use this technique in trading are called "scalper".
Scalpers, who are categorized as day traders, do not only seek to trade within daily time frame.
They also attempt to gain profits on the most minute during trading hours.
Since the scalpers make profit from only few ticks, they will need to trade large positions, take small moves out of the market and do so many times each day to gain significant profits.
In addition, it is your job to identify the market which suitable for scalping.
Ideally, the market should be in sideways when you do scalping trading.
Scalping Techniques There are many techniques in trading that lends themselves readily for scalpers.
I will not provide you with details for each technique in this article.
I will just give you some clues how they can be used for scalping.
Here they are.
Moving Average Channel (MAC): The idea of using MAC is to buy the low of the channel and sell the high of the channel in sideways trending markets.
Point and Figure Chart: The point-and-figure-chart can be used to determine support and resistance level.
The technique is to buy at support and sell at resistance.
The key to select indicators or techniques to be used in scalping is they must be able to isolate a specific trading range which clearly defined as in term of support and resistance.
In conclusion the goals for scalping are as follows.
1.
Trade as often as possible to accumulate each small profit from each trade by taking advantage of small but reliable moves during trading hours.
2.
Do not hold positions for long period, try to exit quickly either at a profit or at loss However, scalping is not allowed in some markets or brokers.
A clear example is in forex trading, some brokers do not allow traders to do scalping.
Some forex brokers allow scalping but traders need to open a specific type of account to be able to do scalping.
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