Scalping Strategy in Trading
Scalping is one of the active trading strategies that relies on opening and closing a large number of trades in a short time to achieve small and repeated profits. It is often used in highly liquid markets such as Forex, gold.
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✅ Advantages of scalping:
1. Quick profits: depend on small price movements (often 5 to 20 points).
2. Limited exposure to the market: reduces exposure to major market events.
3. Many opportunities: you can execute several trades in a day.
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❌ Disadvantages of scalping:
1. Requires high concentration and quick decision-making.
2. Less suitable for small account holders (because the spread and commissions eat into profits).
3. Psychological and mental fatigue due to repetition and numerous trades.
4. Not suitable for quiet markets or those with irregular volatility.
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⚙️ Important tools for successful scalping:
• Fast execution platforms like MT4 or MT5 in Forex and Binance and OKX in crypto.
• ECN or Raw Spread accounts with low spreads.
• Simple technical indicators like:
• Moving Averages (MA).
• Relative Strength Index (RSI).
• Stochastic Indicator.
• Bollinger Bands.
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🕒 Suitable time frames:
• One minute (M1) or five minutes (M5).
• Sometimes M15 or M30 is used just to confirm the trend.
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🧠 Examples of popular scalping strategies:
1. Moving Averages Crossover Strategy:
• When a small MA (like MA5) crosses a large MA (like MA20), a position is opened in the direction of the crossover.
2. Scalping at supports and resistances:
• Open a buy position at support and sell at resistance, provided there is confirmation (like a reversal candle or strong rebound).
3. Scalping with momentum:
• Open a position in the direction of strong momentum, after a clear breakout and entering the market with high momentum (e.g., after a strong economic news).
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💡Important Tips:
• Do not enter the market during news if you are a beginner.
• Limit greed, take profits even if they are small.
• Don't forget the spread – sometimes the price moves 5 points and you haven't achieved anything because of the spread.
• Use an appropriate stop loss – don’t get attached to the trade.
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📌 Is scalping suitable for you?
✅ If you are quick in decision-making and enjoy active trading.
❌ If you prefer patience and waiting for big goals.
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