With the ups and downs we have witnessed lately from Cryptocurrencies, traders are looking at how they can reduce their losses during these ruthless swings.
The cryptocurrency market can be highly volatile at times. However, this volatility can often pave the way for some profit-building strategies. Scalp trading or scalping is one such strategy that can benefit traders from small price moves.
Scalping allows crypto traders to benefit from small price movements without targeting massive profits. Instead, scalp traders place as many trades as possible over short periods. The idea is to combine small gains, eventually adding to a considerable profit.
For example, a trader buys coins at a lower price and makes quick profits by reselling them at a higher price. The trader then repeats this process to profit from minor price movements.
Compared to Crypto Day Trading or Crypto Swing Trading, Scalping is less risky and usually has a better profit margin than the two.
But just like any other trading, you must be a responsible trader, have enough discipline, avoid random trades and only trade with techincal skills to make money.
When is the Best Time to Start Scalping?
The best time frame for scalping should be between 5 and 30 minutes charts. The smaller the time frame, the more possible trade setups there are. It’s important to note that this is entirely dependent on the scalping strategy you choose.
Advantages and Disadvantages of Scalping
All trading strategies have pros and cons, and scalping is no exception. For instance, the risk in scalping is low due to the smaller position sizes involved.
Moreover, crypto scalpers do not try to take advantage of significant price moves. Instead, they struggle to take advantage of small moves that occur frequently.
The high trading fees in some exchanges can significantly reduce overall profits. Also, scalpers need much mental strength to cope with the fast-paced and high-pressure crypto scalping routine.
Finally, this requires sticking to your trading strategies and avoiding trading with emotions.