Scalping is a trading strategy that many cryptocurrency investors favor. With Scalping, investors can earn small profits in a short time. However, making quick profits from Scalping is not easy. In this article, Crypto Trading will introduce you to five effective Scalping methods, shared by experts in the industry. Let’s take a look!
Learn about Scalping in crypto
Scalping attracts many investors because of its potential to make quick profits many times a day. However, Scalping is also a “double-edged sword” with high risks.
What is the concept of Scalping?
Scalping is a short-term trading strategy that aims to profit from small price fluctuations in the market. Scalpers typically make multiple trades in a day, aiming to make small but consistent profits. In the cryptocurrency space, crypto scalping takes advantage of strong market volatility to find opportunities for quick profits.
Therefore, in the volatile crypto world, Scalping becomes the ideal method. To be successful with this strategy, traders need to master technical analysis tools such as indicators and price patterns but also need to constantly update the economic situation. Because economic factors have a direct impact on prices.
When discussing the Scalping crypto trading strategy, it is impossible not to mention Sideway. So What is sideway“? Sideway is a market condition when the price of securities fluctuates at a certain level, with no clear trend going up or down. This is often an ideal time for Scalping traders because they can take advantage of small fluctuations in price to open and close trading positions in a short time. To profit from small fluctuations in the market.
Features of Crypto Scalping
Crypto Scalping is an attractive method for investors looking for stable profits. Here are the main features of this method.
- Unlike day trading or scalping trading does not require high trading frequency. Instead, traders focus on market opportunities that last from a few days to a few weeks.
- The main goal is to achieve stable profits. Typically, traders aim for a profit of around 12%, while keeping their risk ratio below 3%. This shows that they are okay with average profits without chasing short-term fluctuations.
- Compared to other short-term trading methods, transaction fees are usually much lower.
- Since trades last from a few days to a few weeks, traders do not need to constantly monitor the market. This reduces stress, allowing them time to research and analyze the market more thoroughly.
- Traders often use both TA and FA to optimize their success rate. After using TA for analysis, they will consider FA factors to decide to execute a trade.
Advantages and disadvantages of Scalping
Advantage:
- With less trading frequency than day trading and crypto Scalping, traders can hold positions from several days to several weeks without the need for constant monitoring.
- Fewer orders reduce costs, from brokerage fees to other fees. This helps increase profit margins.
- Use technical, fundamental, and high-time frame analysis to make decisions. Higher-quality trading signals increase the likelihood of success.
- Catch the big waves in the market, and bring higher profits. Traders can take advantage of great potential trading opportunities.
- Helps avoid market traps and manipulation.
Limit:
- The lack of large waves reduces profit potential and requires patience from the trader.
- Economic and political news can create unpredictable fluctuations, posing risks and losing profit opportunities.
- This overnight fee reduces profits or increases transaction costs.
- Traders need to be able to recognize and evaluate small fluctuations in the market so as not to be affected. Patience and foresight are key to success.
See more: Learn Momentum – The 3 principles of optimal trading
Guide to 5 ways to make quick profits from Scalping
Scalping is a fast trading strategy that aims to profit from small price fluctuations in the cryptocurrency market. However, it is also a high-risk strategy due to the high trading frequency and the use of leverage. Therefore, it requires skill and experience to be successful. Here are 5 ways to make quick profits from short-term Scalp trading in the cryptocurrency market:
Scalping strategies based on Moving Average or MA
Using moving averages is one of the most popular methods in crypto Scalping. Traders can use MA to determine the short-term trend of the price. When the price crosses above the MA line, this can be a buy signal. Conversely, when the price crosses below the MA line, this can be a sell signal. Combining MA with other indicators will help increase accuracy.
Scalping Strategy Using Ichimoku Chart
Ichimoku is a complex but effective tool for traders who want to use Scalping. Ichimoku charts help identify trends, support, and resistance levels. Signals from Ichimoku such as the Tenkan-sen and Kijun-sen crossovers or the price position relative to the Kumo cloud can help traders make quick and accurate decisions.
Scalping using RSI indicator
The Relative Strength Index (RSI) is a tool that identifies overbought or oversold points. When the RSI is above 70, the market may be overbought and it may be a good time to sell. Conversely, when the RSI is below 30, the market may be oversold and it may be a good time to buy. Using the RSI on short time frames will help traders catch opportunities quickly.
Scalping strategy using Stochastic indicator
The Stochastic indicator is another tool for identifying overbought and oversold points. When the Stochastic crosses above 80, the market may be overbought. And when it is below 20, the market may be oversold. Combining the Stochastic with other tools such as MA or RSI will help increase trading efficiency.
Scalping combines multiple measures
To increase the chances of profit and reduce the risk, many scalpers combine different measures and indicators. For example, combining MA, RSI, and Stochastic with price action analysis will help identify stronger trading signals. This combination requires skill and experience but will bring high efficiency.
Some important notes to optimize profits from the Scalping strategy
Optimizing profits from Scalping requires skill, knowledge, and discipline. It is important to maintain patience and persistence while learning and practicing.
- Choose markets and currency pairs that are characterized by high volatility and good liquidity. Will optimize trading opportunities and reduce risks.
- Set a reasonable risk/reward ratio. To protect investment capital and ensure stable profits in the long term.
- Use money management rules to avoid putting too much capital into each trade.
- Scalping requires speed and quick reaction time from you. Use low-latency trading platforms to ensure accurate and timely order execution.
- Keep track of financial and economic factors that may affect the market.
- Adjust your trading strategy based on actual results and market feedback.
- Avoid being influenced by emotions and always stick to your trading plan.
- Use technology and supporting tools such as technical indicators and trading software to enhance trading decisions and performance.
See more: OKX: Open OKX account – reputable Crypto exchange
Comparison of Swing and Scalping Trading
Check out the Scalping vs Swing trading comparison chart to better understand the two methods:
| Swing Trading | Scalping Trading | |
| Target | Take advantage of price fluctuations in short-term time frames (from a few days to a few weeks) to make profits. | Take advantage of small price fluctuations in short time frames (seconds, minutes, or hours) to make profits. |
| Time frame | Short term (within days to weeks). | Very short-term (seconds, minutes, or hours). |
| Risk level | Medium | High |
| Transaction frequency | Low (one transaction per day or every few days). | High (can perform dozens or hundreds of transactions per day). |
| Suitable for | Investors have experience, skills, and good risk management ability. | Experienced, highly skilled investor. Able to withstand pressure well and have plenty of time to monitor the market. |
Conclude
We have explored the Scalping trading method and ways to make quick profits from investing in cryptocurrencies. The key to success in Scalping is a solid understanding and experience of the cryptocurrency market. Therefore, if you do not feel confident enough in your abilities, come to Crypto Trading. We are willing to advise and support you to make quick profits from this smart investment strategy. Please share with your friends about this online investment method to optimize trading profits together!
Frequently Asked Questions
What are the approaches to Scalping trading?
There are many approaches, including using technical indicators. Like MACD, Stochastic, and RSI; analyzing market structure; and following economic news.
Should I start with Scalping trading?
Getting started with trading depends on your level of knowledge and experience. If you have the patience and willingness to learn, trading can be part of your trading strategy.
What are the good times to do Scalping trading?
Often of high volatility. The European or US trading sessions are popular choices for trading.
