Scalping is a short-term trading strategy that involves making numerous small trades throughout the day to profit from tiny price movements in highly liquid assets. Unlike swing trading or long-term investing, scalpers aim to enter and exit the market within minutes—or even seconds—capitalizing on minute price fluctuations.
The strategy relies heavily on technical analysis, chart patterns, and real-time market data. Scalpers often use tools like moving averages, support and resistance levels, and indicators such as the Relative Strength Index (RSI) or Bollinger Bands to identify entry and exit points. Speed and precision are critical, as profits per trade are small and losses can accumulate quickly if not managed properly.
Scalping is typically performed in markets with high volatility and volume, such as forex, futures, and cryptocurrencies. Traders may place dozens or even hundreds of trades in a single day, using platforms that offer low fees and fast execution.
Risk management is essential in scalping. Tight stop-loss orders and consistent position sizing help protect against large losses. Successful scalping requires discipline, a solid understanding of market behavior, and the ability to remain focused under pressure.
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