There is a method called scalping trading with Bitcoin at virtual currency exchanges, so I recommend it and will introduce and explain it in this article. This method is generally very well known in foreign exchange and stock trading, but many people also use this method in virtual currency FX. Here, I will introduce the advantages and disadvantages of scalping.
What is scalping?
Scalping is an ultra-short-term trading method that completes from new transactions to settlement transactions in seconds to tens of seconds, or even minutes at the longest. This method only takes a few seconds, so trade with a fairly high lot. Traders will be in a state of mind until the moment of settlement. Since the price range targeted in one trade is narrow and the trading time is short, the number of trades tends to increase. Scalping also means “peeling off the skin”, and we will accumulate thin profits like peeling off the thin skin through small transactions.
Advantages and disadvantages of scalping
Scalping is one of the strategies used in cryptocurrency trading. What type of people are suitable for scalping? Since you trade in a short period of time in a fluctuating market, you will incur a fee, even though it is low. It is small, but there is a load, so you should judge the content and decide whether to do it. In a market with a large spread, there is a high possibility of losing money due to risk if you hold a position. Since it is a day trader, you should also collect information about the currency from the news when using funds. If it is difficult to hold it for a day, the key is to cut your losses.
Someone who can spend enough time trading
Scalping is a strategy of trading at ultra-high speed, settling within a few seconds. In this case, you need to keep a close eye on the charts, as unexpected movements can result in huge losses. Scalping requires you to constantly keep a close eye on the trading screen so as not to miss the timing of buying and selling. Those who can constantly check the trading screen have an advantage in scalping. The operating service operates 24 hours a day, both domestically and overseas. Be careful until the transaction is confirmed. You can also choose small campaigns, so make use of the bonuses.
Scalping on economic indicators
One thing to note is that while the impact of economic indicators is not as great in the case of virtual currencies as foreign exchange, they still often move significantly. If you make a mistake, the price can go in the opposite direction, so if you get the timing wrong, you will often lose a lot. This is a trading method that requires experience. It depends on the type of system or tool, but you should understand the exact situation. When purchasing or depositing, it is assumed that the market liquidity is low. Some people start analyzing, but contrary to these predictions, they suffer big losses. It is important to repeat technical analysis over the long term.
Easy to gain trading experience
Scalping involves multiple short trades, so you can accumulate trading experience. However, blindly trading will not give you trading experience. Keep in mind that trades that become trading experience are limited to those where a hypothesis is fully formulated and verified. Repetition will give you a lot of experience. By making repeated predictions and experiencing stop losses, you will grow. By making good predictions and taking advantage of your wealth of knowledge, you will be able to start swing trading and day trading. You will also come to understand the conditions you should seek for in terms of periods and units, and how to manage them.
need concentration
Scalping is not suitable for people who lack concentration. You have to keep a close eye on the chart. If you are in a hurry or your concentration is low, scalping can result in a huge loss. It’s a bit of a responsibility, but try to set your buy and sell prices as low as possible. If you get the direction wrong, you can lose depending on the stock and how you use the indicator. It depends on the environment of the app, but you should manage your risk. Make sure you can find effective opportunities efficiently.
Transaction costs can be high
Scalping involves frequent trading, which means that costs are incurred many times over, resulting in high trading costs. The disadvantage is that the trading frequency is several times higher than usual, so costs are inevitably high. Be sure to keep the amount down within a few hours and avoid any major losses at the end. Practice is required to get used to it efficiently. Generally, you will improve by continuing to do it one step at a time.
Scalping recommended for beginners
If you are new to trading, all you need is experience. In order to gain experience, you need to do a lot of trades anyway. By doing the number of trades, you will have the ability to read the next price movement, so we recommend that you study with scalping.
depends on contract rate
Scalping is very important because momentary price movements greatly affect profits. Execution rate refers to the ability to complete a trade at the price ordered. Scalping is all about entry timing, so an exchange that has no problem with execution power is good.
Open an account for free
Gate.io allows you to open an account for free. I also explain how to open an account in the article below, so I hope you can refer to it.
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