Scalping strategy is a short-term trading strategy in financial transactions, where the core idea is to earn small profits by frequently buying and selling to capture short-term price fluctuations, accumulating gains just like 'peeling an onion'. Here are its key points:

Core Logic

- Short-term Price Differences: Utilize slight market fluctuations (such as in forex, futures, stocks, etc.) to open and close positions within minutes or even seconds, with low single-trade profits but aiming for high win rates and trading frequency.

- Risk Control: Due to the extremely short holding period, strict stop-loss settings are necessary (e.g., exiting if a loss of 1-2 points occurs) to avoid significant losses when market reversals happen.

Operation Characteristics

- Highly Liquid Instruments: Choose assets with high trading volume and active volatility (such as EUR/USD in forex, major stocks in US markets) to ensure ease of buying and selling with low price spreads.

- Technical Dominance: Rely on short-term technical indicators like moving averages, MACD, Bollinger Bands, etc., to capture ultra-short trends or breakouts at support and resistance levels.

- Sensitivity to Trading Costs: Frequent trading requires consideration of fees, spreads, and other costs; if the costs are too high, they can erode profits.

Advantages and Disadvantages

- Advantages:

- Short holding periods, less affected by overnight risks (such as news events).

- If the strategy is mature, it can stabilize profits in choppy markets.

- Disadvantages:

- Extremely high demands on trading discipline, emotional fluctuations can easily lead to frequent stop-losses or holding onto losing positions.

- Easy to get caught in one-sided large market movements.