Scalping is a technique used in financial markets, especially futures and commodities. It is the process of buying or selling something quickly with small profit margins.
What is scalping?
The term ” scalping “comes from the idea that one can” speculate “with prices taking small profits over and over again (often without taking into account the risk ). Like any type of trade, scalping is a high-risk, high-reward opportunity involving stocks, currencies, cryptocurrencies, and commodities.
Scalping, or short selling, can go wrong quickly. It’s also not an easy process, and is often done at short notice, such as when futures are about to settle.
How to scalp cryptocurrencies
As with many of the techniques in trading cryptocurrencies , it is not always easy to choose good scalpers. Most investors get scalping to work well when they do their research and analyze when the market is about to trend higher. For this, it is usual to observe the money flow , the exit of a consolidation pattern or the tracing of certain movements. Investors also look at things like the average daily operations (DAV) and the number of entries. It is important to note that there are always risks in any trade, but few ways to increase profits, and the high volatility of cryptocurrencies can lead to operations with poor results, which can be avoided by investing in securities that you know from having thoroughly studied their history and their graphs.
The benefits of scalping with cryptocurrencies
The way in which many cryptocurrencies work, both in terms of the way they are mined and their uses and applications, can affect their value on the stock market. We have already seen several currencies take off like foam because of a tweet or a headline, such as the case of DOGECOIN, and the speculation that comes with it can be a great opportunity for traders who carry out scalping.
The drawbacks of scalping
As traders who study the markets, we all agree that it is unethical to attempt to manipulate prices. Scalping can be exciting for some people, but it is a very expensive game, because it usually requires a heightened sense of patience and knowing when to enter and exit a trade. Scalping can also make the wrong people rich, and take advantage of the less experienced in the market, as well as create uncertainty and fear in the markets.
To avoid the latter, new tools have emerged that allow us to learn from other Traders, know their operations and their results. This is called copy trading and we explain it here As you can see, cryptocurrencies are beginning to be in the crosshairs of many new investors. If you are thinking of trading cryptocurrencies, we recommend joining NAGA, which offers an account DEMO with $10,000 so you can do the tests you need, before investing real money.
Also, you can earn money by helping others to earn it, by sharing your trades.