Scalping Strategies:
Some scalpers work around the bid/offer, buying on the bid and selling on the offer to pocket the spread, or perhaps a tick or two more. This is perhaps the "purest" form.
Slightly longer term scalp trades (there's an oxymoron!) are generally taken from three different trading patterns:
Breakouts from consolidation
Bounces off support and resistance
Retracements in a trend. Retracement scalps may be taken with the trend following a pullback, or, if the trader is sharp and brave, countertrend during the pullback.
What sets a scalper apart from other traders is that the profit target is likely to be small. While a longer term breakout trader might wait for the breakout to turn into a trend, the scalper will generally be happy to pocket a few points during the frenetic trading activity as the breakout occurs. (S)he may well trade in large size with an eye on the order flow in order to spot the optimum time to enter and exit.
Some traders will scale out most of their position for a scalp but leave some on, in order to capitalise on further price movement, should it appear. Different market conditions often require different approaches so scalping can be a tool in the trader's box as opposed to the method always used.read more.......
Slightly longer term scalp trades (there's an oxymoron!) are generally taken from three different trading patterns:
Breakouts from consolidation
Bounces off support and resistance
Retracements in a trend. Retracement scalps may be taken with the trend following a pullback, or, if the trader is sharp and brave, countertrend during the pullback.
What sets a scalper apart from other traders is that the profit target is likely to be small. While a longer term breakout trader might wait for the breakout to turn into a trend, the scalper will generally be happy to pocket a few points during the frenetic trading activity as the breakout occurs. (S)he may well trade in large size with an eye on the order flow in order to spot the optimum time to enter and exit.
Some traders will scale out most of their position for a scalp but leave some on, in order to capitalise on further price movement, should it appear. Different market conditions often require different approaches so scalping can be a tool in the trader's box as opposed to the method always used.read more.......
Advantages:
Very effective use of capital with minimal risk per trade.
High percentage win rate.
Suitable for the impatient trader who is prepared to devote a lot of time and continuous focus to the market.
Event risk is small as the scalper will usually be almost certain of a fill at the chosen exit point even if conditions suddenly change.
Knowledge of fundamental analysis not required, although scalpers should be aware of news and/or earnings releases.read more.....
High percentage win rate.
Suitable for the impatient trader who is prepared to devote a lot of time and continuous focus to the market.
Event risk is small as the scalper will usually be almost certain of a fill at the chosen exit point even if conditions suddenly change.
Knowledge of fundamental analysis not required, although scalpers should be aware of news and/or earnings releases.read more.....
Disadvantages:
Intense, draining and demands a lot of screen time. Accurate timing is vital.
Trading platform, data provision and connection the the exchange often expensive.
Danger of "death by a thousand cuts" to the inexperienced.
Higher cost per unit of profit than longer term strategies.
Requires complex knowledge of market structure and order flow.
Can be stressful
Not suitable for spread betting.for more informations...
Trading platform, data provision and connection the the exchange often expensive.
Danger of "death by a thousand cuts" to the inexperienced.
Higher cost per unit of profit than longer term strategies.
Requires complex knowledge of market structure and order flow.
Can be stressful
Not suitable for spread betting.for more informations...
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