Scalping is a technique used in the financial markets, especially in the futures and commodities markets. 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” on prices by making small profits over and over again (often without taking
risk
account). Like any type of trading, scalping is a high-risk, high-reward opportunity involving stocks, currencies, cryptocurrencies and commodities.
Scalping, or short selling, can go wrong quickly. It is also not an easy process, and is often done on short notice, such as when futures are about to be liquidated.
scalping cryptocurrencies
how to scalp
As with many of the techniques in cryptocurrency trading, it is not always easy to pick good scalpers. Most traders get scalping right when they do their research and analyze when the market is about to trend upwards. To do this, they usually watch and wait for
moneyflow
, the exit of a consolidation pattern or the tracing of certain movements. Investors also look at aspects such as the average
daily trading volume (DAV)
and the number of entries.
It is important to keep in mind that there are always risks in any trade, but the
high volatility
of cryptocurrencies can lead to poorly performing trades, which can be avoided by investing in stocks that you know from a thorough study of their history and charts.
The benefits of cryptocurrency scalping
The way many cryptocurrencies work, both in terms of how they are mined, their uses and applications, can affect their value on the stock market. We have already seen several coins take off exponentially because of a tweet or a headline, as in the case of DOGECOIN, and the speculation that comes with it, can be a great opportunity for traders who perform 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 can be 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, at the expense of those less experienced in the stock market. It can also create uncertainty and fear in the markets.
To avoid some of those problems, new tools have emerged that allow us to learn from other traders, their trades and their results. This is called
copy trading
and we explain it here
As you can see, cryptocurrencies are starting to be in the spotlight for many new investors. If you are thinking about trading cryptocurrencies, we recommend joining NAGA, which offers a
DEMO account with $10,000
so you can do the testing you need to do, before investing real money.
You can also earn money by helping others earn money by sharing your trades. Discover the benefits of social trading: https://canaltrader.com/plataforma-de-social-trading