Scalping strategy is trader activity in time frames from 1 – 30 minutes. The profit using scalping strategy is a few points, only. Therefore to increase profit on scalping you need to increase the number of traded instruments, or the number of trading sessions.
It seems simple. But not all scalpers work on the same scheme, not everyone understands and conveniently the same. Finally there are different methods inside scalping strategy – sub-strategy.
Concentrated Scalping strategy
1. Trade all methods on a single exchange. Trader by analysis and samples selects that exchange (futures, currency pair, etc.), which knows thoroughly, feels any of its fluctuations, in other words, chooses a favourite on. Due to, that a daytrader trades this stock daily, using for this purpose all methods, techniques and skills that he owns. Finally he becomes an expert in this paper. As a result he scalps it, without being distracted by something he does not understand in scalping.
2. Furthermore, trade in proven methods on all securities of the market, where these methods can be applied.
Since, the daytrader knows exactly which sequence of actions allows him to calculate the winning moves. Therefore, he selects 1-3 of the most reliable from such methods. And applies methods to all actions, on which it is only possible, without allowing any doubtful combinations.
Restriction to time intervals Scalping strategy
1. Scalping on the level breakout scalping strategy. The trader scalps the exchanges in the interval of the breakout of the level and closes position at the end of a movement. To do this, he must accurately calculate the breakout (support and resistance levels) levels. Finally, he has to self-control, to be able to close its position on time.
2. Scalping on the resistance level scalping strategy. The strategy is similar to the “level breakout” strategy. It consists of the ability to respond quickly to price movements between the rebound from the resistance level and the achievement of a new support level.
3. Scalping on volatility. The trader calculates the risks arising from the use of a financial asset for a specific time period, selects the most volatile securities, and scalps them until they cease to be so.
By trend Scalping strategy
1. Scalping strategy by the trend. The daytrader watches the chart. Activates the indicators necessary for tracking the trend, first of all. Having found the correct entry point after the rollback and the approach of the price to the level of resistance / support, the daytrader sells / buys.
2. Scalping strategy against the trend. There is an opinion that counter-trend trading is an occupation for mothers and desperate traders. A successful entry into the action against the trend is a very difficult issue, consequently it requires exposure and certain analytical tricks. Scalping against the trend, especially relevant is not to become someone who is being scalped.
Any asset Scalping strategy
Visual instruments Scalping strategy
1. Scalping can be adopted almost in any asset – shares, currency pairs, futures, etc. Each trader decides this independently, depending on the specifics of the market and the tools used by him. Finally, the most traders believe that the most profitable field for scalping is the futures market – due to their high liquidity and dynamics.
1. Scalping by graphic patterns. It implies the use of figures (shoulders, triangles, flags) already mastered on other strategies. Requires the ability to measure the range of shapes with a changing scale of the timeframe. Furthermore you can work on support and resistance levels as well. Due to, that it is on graph.
2. Scalping by indicators. Indicators are working in scalping in the same way as in other strategies. You just have to manage to process the received signals.
3. Scalping by exponential motion. Movement domes in counter-movement after an unexpected, “inexplicable”, from the point of view, of economic trends. The jump in exchange due to the receipt of a significant order. It is considered one of the most challenging method. Sometimes it does not pay for the efforts expended on it.
Stage of automation Scalping strategy
1. Automatic systems. Hence the trade with the help of an automated system is devised to take on some of the tasks with which a loaded trader is physically unable to cope. Before choosing an “adviser”, you should understand how they work and test the system in a demo mode first of all.
2. Own robot. Most of all you will be caught by marketing activity: “Acquire a robot from us, earn money, a lot and without problems.” Therefore, to trust your trading to a robot, especially in scalping, you need to fully understand the algorithm by which your “adviser” acts. It requires a high level of trading skills. The Forex robot is just a junior partner not a magical clone, to which you can throw all the work.