What is Scalping? How Scalping Works?
Beginner's Guide to Scalping

What is Scalping and How it Works?

Scalping is one of the most advanced and effective approaches to operating Day Trading and consists of performing various operations over the same day on the same financial instrument , refusing to predict large price movements in favor of minor fluctuations but easier to predict and exploit.

Read More: What is Day Trading?

While each operation generates a lower profit, the daily gain of those who do scalping is high and above all constant over time as it derives from the sum of the individual operations: this translates into a drastic reduction of risk as it is spread over each of the individual and multiple operations, making scalping a relatively safe technique.

The operation of scalping is based on identifying on the book or on the chart (depending on the type of scalping that is practiced) of the very precise entry and exit points, which allows for a very low stop loss compared to the potential take profit: this is made possible first of all thanks to the reduction of the operational timeframe which together with the analytical technique acquired by the scalper, allows to predict price fluctuations within certain exchange boxes, in a meticulous way.

Is it easy to do scalping?

Scalping is not a really easy technique but it is a technique that works and there are no techniques that really work and that are also

The advantage is that once learned it is very simple to apply and does not cause any stress for the user unlike other trading methods that force you to leave a position open overnight or to be exposed when news comes out. You become cold money machines!

In any case, Soft Scalping has been added since 2006 to pure classic scalping, i.e. dynamic scalping, which, while retaining the advantages of classic scalping , is much easier to learn and has finally made all the benefits that scalping entails accessible to all.Soft Scalping

Scalping today is the most widespread and applied day trading strategy and guarantees those who master it to earn in a constant and relatively easy way.

The advantages of scalping

The advantages of scalping are different, and make it one of the most sought-after techniques by anyone who wants to operate with constant results and with a low risk profile .

We can summarize some of them below

  1. It becomes possible to earn in any type of trend or market , not worrying about sudden movements that often generate loss, the deleterious effects of news or other factors external to the market
  2. Operational risk reduced to a minimum , thanks to the distribution of the same on each operation and to an extremely low stop loss
  3. Constant and stable gain over time: this is possible thanks to the fact that the daily profit is built on the sum of operations of similar size and low risk, and that the gain of those who do scalpers does not derive from being able to take particular movements, but rather the normal fluctuations that distinguish each standard operating day.
  4. Scalping can be considered a real work activity: it is a direct consequence of the advantages listed above and in particular from the fact that a day at a loss will very rarely end and indeed the gain will be constant and similar every day
  5. Scalping it means operational freedom: being able to apply it when you want (at any time or market), and even for a few hours a day, if you have little time, scalping is undoubtedly the most flexible and integrated technique in your daily management

Does scalping really works?

Scalping is one of the most effective operating techniques
There are some rumors on the internet that scalping does not work, but this is absurd since the trading scalpers (i.e. those who do scalping) are the ones who statistically survive every phase of the stock market and considered the only true professionals in the market.

There are even sites that define illegal scalping , which is false in any case : it is also true that some brokers dealing desk (read article related to the ” forex scam “,) precisely because they act as counterpart / bank to customers, have little convenience and discourage scalping because those who practice it could get the better of them, so semma is the opposite, i.e. that scalping is highly profitable for those who practice it ).

However, it is advisable to practice scalping on the real market, or through an intermediary (broker, bank or authorized sim) who connects each trader to an actual Exchange on ECN technology. such as:

We can therefore conclude that scalping works all right, as long as the technique is applied correctly and without improvising yourself as a scalper after having just read some article on scalping or seen some scalping videos on you tube , useful for understanding the potential of the methodology but not sure to learn it.

How to learn scalping?

For those who want to learn how to scalping correctly, getting the maximum benefit from the advantages it entails right away is essential

Nor is it practically ever enough to view free video courses or manuals in pdf created by the same brokers or sites of alleged trading schools in order to subsequently sell other services or products.

To this end, it is important to identify the structures qualified to teach the technique and above all to rely on well-known and recognized names in the field of scalping , preferring courses where a real coaching by the teacher is subsequently provided to ensure an easy transition from theory to practice.

What to learn more about trading? Click here for more Trading Guides

The cost incurred for training will thus be recovered almost immediately and will be money well spent since not only will earnings accelerate, but will avoid the losses that those who improvise self-taught scalping will almost certainly have to face.

Where to apply scalping?

One could mistakenly think that depending on the type of scalping you want to practice, a certain type of financial instrument may be more or less indicated than another: in reality one of the main advantages of scalping is that it can be successfully applied practically anywhere. as long as it is a liquid instrument.

scalping where to apply it tIn fact, it is important in scalping to use liquid instruments as you must be sure to find a counterparty suitable for your size both in entry (position opening) but above all in exit (take profit or stop loss), since otherwise what in theory should be a In practice, an operation with a very low risk / return ratio becomes a feasible or inconvenient operation.

While as far as stock scalping is concerned this aspect can be relevant and you will have to look for the most liquid ones (one of the parameters to keep in mind is the value of the tick compared to the value of the share as this usually involves a higher ratio higher by price level), with regard to scalping on futures usually the problem does not arise as those linked to extremely traded underlyings such as index currencies and commodities are usually used.

It is also possible to do forex scalping without using derivatives but by connecting directly to the main currency exchanges such as Lmax , but scalpers usually prefer to use futures because they are much easier to manage at the platform and operation level, not to mention that they guarantee greater leverage and therefore lend themselves perfectly to carrying out fast and profitable operations.

Regarding the growing phenomenon of scalping on cryptocurrencies , we want to immediately clarify that beyond the appeal it can have it is extremely difficult precisely because they are much less liquid instruments than traditional currencies or other assets: although exchanges are constantly growing in the various enabled exchanges, among the valid price levels where there is liquidity there is an enormous number of ticks: this problem also arises if we talk about scalping on Bitcoin , let alone for smaller cryptocurrencies.

We therefore believe that cryptoscalping will certainly become more and more viable and will probably represent the future of scalping itself , but given the perfect functioning of scalping on more canonical tools such as currencies, commodities, indices and shares, we do not see why life becomes complicated today.

Platforms & brokers that support Scalping

The most used platforms for scalping are many and differ both in performance and functionality, as well as specific ergonomics: however, we must not think that one must necessarily have the best operating platform or trading software to be able to scalping correctly .tradingview scalping

A platform like Tradingview for example, even in its free basic version, allows in fact, if connected to an ECN Broker that offers a connection to the real market, it can be a good starting point to start scalping: of course, taking the pro version you will have more features such as the ability to manage multiple charts at the same time and the advertisements will disappear) which are sometimes really annoying) but the point is that you it can start at 0 cost and then implement other features as the need arises.

There are also professional scalping platforms such as Multicharts (also suitable for automatic scalping as it is highly programmable) or Quantover (perfect with all markets but with an extra gear for crypto scalping having a ready-made layout for Binance.) which have a really high cost, but which are offered free of charge by some brokers specialized in futures such as Amp (the latter in particular has the lowest commission costs per contract on the market ).

If, on the other hand, you want to remain nationally, you can contact for example IwBank which has a proprietary Quicktrade platform of excellent workmanship and perfectly usable in scalping, of the most advanced Sphera considered to date the most performing Italian trading platform.

With the support of our community here at Investing Scan we have compiled a list with the brokers that support scalping. We have also conducted extensive testing and reviews and we present them in the list below:

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How to build a scalping workstation

Building the scalping workstation is the first step to take if you want to work in an ergonomic and functional way with hardware tools that are suitable in substance and in the arrangement for your scalper needs.

scalping station scalperLet’s start from an assumption: the perfect trading station does not exist , let alone the scalping one.

Therefore, just as in the choice of trading software, even with regard to the hardware it will not be necessary to aim for the maximum, having a PC with the latest processor or a super graphics card (just a quad core i5 and a video card that supports an external moniotr in 4k 60 hz), but will blame to think about costs / benefits starting certainly from the minimum necessary to work well.

The starting point will not actually be the PC but the monitor (or monitors): the scalper in fact requires a large working area both in terms of resolution and screen diagonal ; although it is possible to manage in some cases the positions on the move from a laptop or even a tablet / smartphone, the best results being able to analyze and manage multiple instruments on an adequate display (if single at least 28 inches and at least quad hd, or 2560×1440, if instead double it is also good 24 inches full hd each)

An excellent scalper stationit could therefore be made up of a laptop (no matter the diagonal as long as it is at least full HD) and a monitor to be connected to an external Quad Hd or Ultra HD: in this way you can manage graphics and books in the best possible way when you work from a fixed location, but you will retain the flexibility of being able to work outside your home or office using just your laptop.

Obviously, with time and the earnings achieved, it will be possible to monitor (the vertical one is very convenient in order to view more graphs in series), and other peripherals, but just as the saying goes “the dress does not make a monk” we would like to say that “it will be the operating station to do the Scalper”: what matters will be to have really learned to do scalping.

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