Scalping and its Benefits/Advantages?

[Ese11]

i learnt the main goal of scalping is to buy (or sell) a number of shares at the bid (or ask) price and then quickly sell them a few cents higher (or lower) for a profit. Many small profits can easily compound into large gains if a strict exit strategy is used to prevent large losses,what other advantage do one gain from scalping, one as a newbie and as an expert?

 

[Enivid]

The benefit is the shorter holding period - you do not get stuck with a position for too long, so the many is always available to you when you need it. The chance of getting carried away by some huge unexpected market event is also lower for scalping than for long-term trading.

 

[wisdom]

Scalping has many advantages whereby by scalpers profit from small moves in the forex market. In scalping the risk is small because you spend less time in the market. Scalping involves having a proper understanding of the forex market so as to be able to make quick decisions. And it is very suitable for impatient traders who can not stay long in the market.

 

[Bosschick]

Scalping involves fairly low risk as the losses are low.
2. Scalping opportunities are plentiful, throughout the day.
3. Scalping allows for diversity in markets, trading in several
different markets at once.
4. Scalping can be profitable even if you trade only a small
amount each day.
5. Over time, profits add up and can reach great value.

 

[eyeball]

Scalping

Scalping can be profitable given the following set of prerequisites: 1-A highly volatile market as measured by the relative ranges of the time period you're trading. ( The greater the differences between highs and lows the greater your chances of profitability) 2- A genuinely good and consistently profitable algorithm or price action plan that yields predictable profitable results 3-Low broker spreads and high liquidity 4-Above all remember the scalpers credo " my first profit is my best profit" AND to the contrary of most advisers don't be afraid to average a losing position if you know what you're doing.

 

[olivine]

In scalping we get quick profits. it is profitable way of trading you can close positions any time within seconds. Scalping should try after some experience. I did scalping much on demo to gain all knowledge abouts it dealing. As we earn quickly we can loose too in no time.

 

[Adam Jackson]

Diverse short term trading approaches can be used by the traders if they desire to work with smaller trading risks here. Even scalping has been used as one of the most demanded trading strategies which is bringing good trading profit within lower risk level. Though every trader can work with the effective trading approaches, scalping is being considered as one of the best profitable trading stratagem in the current days.

 

[pippin]

i learnt the main goal of scalping is to buy (or sell) a number of shares at the bid (or ask) price and then quickly sell them a few cents higher (or lower) for a profit. Many small profits can easily compound into large gains if a strict exit strategy is used to prevent large losses,what other advantage do one gain from scalping, one as a newbie and as an expert?

Its advantage is speed, many market participants simply can't compete with you in speed of execution because they place larger orders which need more liquidity. While you can trade small lots catching market momentums, breakouts and bounces which usually allow to make 2-5 pips per trade of profit.

 

[Nikolas84]

Scalping generate lot of wining trades. It is normal to have 90% win rate, but on the other hand you have to control your loses very tightly because without stop loss in place you can have devastating outcome. It is highly profitable but very intense, difficult and time consuming business. I can't recommend scalping for traders who are not 100% committed to intraday trading, because it is something that require lot of time and dedication.

 

[mandy828]

Scalping is basically a trading style where the aim is to make quick profits by buying and selling stocks or instruments for a very short duration. Scalpers try to take benefit of intraday trading as well. In this, timing is a very important factor and they employ a degree of leverage to maximize profits. Scalpers generally make decisions based on :

• Nature of price movement
• News flow,Technical indicators
• Support and Resistance levels etc.
  

 

[Nikolas84]

For successful results with scalping you need several elements in place - first, very low spread/commission broker. Every cent matters when you aim to scratch the surface of the market. Second element - you need a proper strategy (automated or manual/sentiment based) that shows you the perfect entry points where the market is over extended in the one direction and the supply/demand imbalance is in place. Scalping is best for conditions where no apparent trend is in place. Third ingredient is proper selection of take profit to stop loss. Very often 1:1 risk/reward is normal here or even lower like 2:1 risk/reward. This mean for every $1 earned you risk $2. This is unproductive with swing trading, but here due to higher percentage wins (often above 80%) it is appropriate. If you get better than 1:1 risk/reward it is fantastic, but from my experience I can say it is very hard and you have to trade extremely selectively which is not always practical, because you extract small profits and if you have very few of them, than there is no point of doing this exercise. In overall it is hard, difficult to code in a rigid logic, but if you are persistent manual skills can be developed. I know some guys trying to use deep neural networks to make scalping run for them, but don't know what kind of results they got.

 

[Ann]

I do not agree that there are some small risks in scalping. There are large lots, and therefore great risks. Scalping stoploss is often much larger than rophytes. Therefore, one stop loss will devalue your achievements for several transactions. Also in scalping is the spread. It eats up a substantial part of your profit. For scalping it is better to use robots. Manually scalp suicide.

 

[larry_009]

Scalping is a short-term trading strategy where traders trade during the most liquid hours and benefit out of the quick price fluctuations in the market. They do not hold their position for too long, rather, they jump into and out of the market in some seconds or minutes.
Scalping has got a lot of benefits. You can take advantage of numerous market signals on short time frames and can easily be through with your profits and losses before the market closes, so there is no overnight risk involved. Scalping saves you from putting time into fundamental analysis as technical analysis is enough for the same.

 

[Ary Barroso]

Scalping is a short-term trading strategy where traders trade during the most liquid hours and benefit out of the quick price fluctuations in the market. They do not hold their position for too long, rather, they jump into and out of the market in some seconds or minutes.
Scalping has got a lot of benefits. You can take advantage of numerous market signals on short time frames and can easily be through with your profits and losses before the market closes, so there is no overnight risk involved. Scalping saves you from putting time into fundamental analysis as technical analysis is enough for the same.

Good point; really we should always play with low risk reward ratio! Anything more than 2% risk reward ratio would be costly for sure!