HFM information and reviews
HFM
96%
FXCC information and reviews
FXCC
92%
FxPro information and reviews
FxPro
89%
FBS information and reviews
FBS
88%
XM information and reviews
XM
86%
NordFX information and reviews
NordFX
86%

What Is Scalping Trading in Cryptocurrency?


Scalp trading in crypto is a strategy that short-term traders employ to take advantage of trading opportunities. It is not a novice, but it can be profitable. The professional scalper has significant discipline, so it may or not be for certain people. Scalp trading in crypto brings challenges but can be beneficial. So-called “scalp trading” is a style that specializes in profiting off small market movements and making a fast profit from reselling those positions. Quite often, the trader will use prominent positions to try to make a profit from small moves. This means that the trader is in and out of the market several times a day on average, and therefore traders take on less risk as far as time is concerned. This is a short-term crypto strategy in its purest form. 

Scalp trading is complex and takes a certain amount of experience and agile behavior to get good at this. The most important thing you can do as a scalp trader is to have a rock-solid exit strategy because the significant danger is that you hang onto the losses for far too long. If that’s the case, overcoming failures would take an extraordinarily high success rate. Crypto scalpers understand that it is a high-risk/high-reward situation they find themselves in and take steps to mitigate disaster.

How does scalp trading work? 

Scalp trading is very straightforward. It works the same way as any other trading because you are trying to find something at a lower price and sell it at a higher one. Alternatively, if you are trying to short the market, you are selling the market at a higher price and then rebuying the asset at a lower price. 

Either way, the idea is that you are trying to do so in short time frames, mitigating the time spent in the market, so, therefore, more significant swings do not work against you. However, the position sizing in a scalp trait is quite often a lot larger because the idea is that you have a minimal amount of leeway, meaning that if the trade starts to go against you, the trader will exit before the losses get out of hand. It is common for scalpers to be in and out of trades in just a few moments, sometimes even less. 

Crypto Scalping vs. Forex Scalping 

Both crypto and Forex traders employ scalping strategies, which have many similarities and differences. You can trade both in this style by understanding where these markets overlap and where they do not. Scalping strategies can vary drastically, mainly because the spread can be radically different in markets. 

Another thing worth pointing out is that if you are going to scalp the crypto market, you need to trade the CFD or contract for difference market, which is offered at PrimeXBT. This is because all you have to do is press the “buy” or “sell” button. You do not have to transfer over the blockchain into a wallet and vice versa. With this, the speed is much more viable for scalping than typical exchanges. 

Advantages and disadvantages of crypto scalp trading 

Before you begin to do any crypto scalp trading, you need to understand that there are both advantages and disadvantages to this type of trading style. The following points are some of the most obvious ones, but there will be specific nuances depending on the market you are trading.

Advantages of scalp trading 

There are some advantages to scalp trading, the first one, of course, being that you are not in the market for very long, so the idea is that the risks of some type of “black swan event” happening are much less likely. This is when some kind of random news rocks the market back and forth. By being in and out of the market relatively quickly, the idea is that you take your profits and leave immediately. 

Another advantage, of course, is the fact that it takes much less in the way of movement to make a profit. By using short time frames and being in and out of the market quickly, traders typically will use a more significant position to take advantage of these moves. You can quickly make a lot of money if you are good at it.

Scalping LINK/USD 1 minute chart

Scalping LINK/USD 1 minute chart

Disadvantages of scalp trading 

One of the most significant disadvantages to scalp trading is that it takes a lot of nerve to hang onto trades, as markets will most certainly bang around erratically on short time frames. After all, it takes very little to move the market a few ticks on the one-minute chart compared to moving a few hundred ticks on a weekly chart. 

Another major disadvantage of scalp trading is that most of the time, traders will use prominent positions, and therefore they need to have a high hit rate because losses tend to be more often.

These losses need to be much smaller than gains, but trying to get in and out of the market quickly is not as likely to have a substantial risk-to-reward ratio. For example, if you are a “swing trader,” you might have a system that risks $1 for every $3 profit. In other words, if you are correct, 1 in 4 attempts, you will be breakeven. You would gain $3 while losing $3. In a scalp situation, having that type of risk-to-reward ratio is tough, so you need to be correct much more often.

Types of Crypto Scalping Strategies 

There are several ways to employ a crypto scalping strategy, which are virtually limitless. There are a couple of major ones that a lot of traders will use, including: 

MANA/USD trading near the “big figure” of 0.70

MANA/USD trading near the “big figure” of 0.70

How do you start crypto scalping? 

Because you are trying to profit on very short-term moves in the crypto markets, you will find the CFD markets the best alternative to taking custody of crypto and then going through the entire process of moving it around. With the PrimeXBT platform, you must press a button to get in or out of the market, regardless of direction. 

Conclusion 

Scalp trading is a tough and challenging endeavor. However, those who are good at scalping can earn a significant number of daily profits, as there will be so many opportunities. However, it’s not as if it’s as easy as pressing the button and cashing out. However, it’s not impossible; therefore, if you have the right qualities, you can do quite well scalping. 

The most important thing you need to do is pay close attention to the movement in the marketplace and recognize when an opportunity presents itself. The second most important thing is understanding that the trade not working out needs to be exited immediately. You do not have the luxury of letting the trade “breathe” in this environment. This comes down to psychology. Therefore psychology is crucial when it comes to the idea of doing this. 

Scalping will also be very sensitive to the spread, so some cryptocurrency markets will not be as likely to be scalped. The tighter the spread, the better off you will be, so make sure you understand how much “distance” you need to cover to get profitable. 

FAQ: Frequently Asked Questions

#source


RELATED

Copy Trading: A Comprehensive Guide to Social Financial Strategy

Modern trading platforms and strategies continually evolve, offering investors innovative ways to navigate financial markets. One such strategy that's been catching waves lately is copy trading...

Best strategies for Forex beginners

Forex trading attracts new players by its unlimited earning potential and deceptive simplicity. After reviewing a trading platform's functionality, it may...

Unlocking the Potential: Navigating the Dynamics of Day Trading the EUR/USD

In the realm of financial markets, day trading is emblematic of the fluid nature of investment horizons. Among the vast array of trading instruments, the EUR/USD currency pair reigns supreme...

Free Forex trading system that works

Financial markets shouldn't be traded without a sound tried and tested trading system, and the Forex market is no exception. Making the right...

Why are 98% of Forex strategies ineffective?

This question is probably asked by every novice trader. Almost every information resource on the subject of financial markets provides a separate section...

Locking Positions In Forex Trading: Application And Benefits

Currently, there are many proven, as well as quite controversial ways to conduct efficient trading. Position locking can be safely attributed to the second - controversial category...

Short-Term vs. Long-Term. What is Your Strategy?

People always want to find the best type of trade to invest in. This particularly holds for short-term and long-term trading. This decision, however, varies from person to person...

Forex trading techniques

The forex market is an incredibly active and highly volatile financial market accessed by millions of traders worldwide. With a daily trading volume exceeding US$6 trillion...

Top Investment Opportunities In 2024: Charting Your Path to Financial Success

As we edge towards the end of 2023, the investment world is buzzing with anticipation. The S&P 500's resilience, despite not reaching its peak of December 2021, signals a cautiously optimistic environment for investors...

Trading exit strategies: How and when to exit a trade

Imagine being so in control of your exit strategies that you could come out of a losing trade without feeling any emotion and simply move on, unaffected...

Five Tips For Enhancing Your Trading Performance

Trading is a highly competitive field that requires skill, discipline, and knowledge. Whether you are a beginner or an experienced trader, there is always room for improvement...

Mastering Cryptocurrency Trading: Strategies for Bitcoin, Ethereum, and More

Cryptocurrency trading has become a captivating realm for investors and traders alike, offering the potential for substantial profits, particularly when combined with tools like 100x leverage...

Steps to a successful forex trading strategy

Are you an aspiring trader on the cusp of diving into the world of trading forex but unsure how to go about it? Or are you a seasoned forex trader perhaps who’s become a little too complacent...

Best times to trade popular financial instruments

Trading in the financial markets in a way that increases your potential for success requires skill, expertise, vigilance, and grit. Knowing the best times to trade the market is dependent...

Avoiding Bull Traps in Trading: Understanding and Strategies

In the dynamic realm of financial trading, a solid comprehension of various market phenomena is the linchpin for triumph. A pivotal concept that demands traders' attention...

The Rollercoaster of Day Trading: Navigating Financial Downfalls and Crafting Success

Day trading is a world rife with both exhilarating highs and sobering lows, embodying the essence of the classic risk-reward paradigm. Within its tumultuous landscape, tales of day traders and hedge fund maestros...

Scalping vs Day Trading: What is the Difference?

Most beginning traders understand the importance of having a good trading strategy. However, it is only after you have a trading strategy that is congruent with your personality...

The7 Strategy - Grail for Beginner Traders

Among the various trading systems available for free, only a few of them are effective in practice. For the successful application of such strategies, it is enough...

Martingale Forex Strategy

The dream of every trader is to find a strategy that guarantees if not 100% success, then at least 99.99%. Of course, at first glance it looks absolutely incredible...

Exploring the Efficacy of Forex Hedging Strategies

The world of forex trading is marked by its dynamic nature, offering substantial opportunities along with inherent risks. In an effort to mitigate these risks and protect their investments

Vantage information and reviews
Vantage
85%
FP Markets information and reviews
FP Markets
81%
IronFX information and reviews
IronFX
77%
T4Trade information and reviews
T4Trade
76%
Exness information and reviews
Exness
76%
Just2Trade information and reviews
Just2Trade
76%

© 2006-2025 Forex-Ratings.com

The usage of this website constitutes acceptance of the following legal information.
Any contracts of financial instruments offered to conclude bear high risks and may result in the full loss of the deposited funds. Prior to making transactions one should get acquainted with the risks to which they relate. All the information featured on the website (reviews, brokers' news, comments, analysis, quotes, forecasts or other information materials provided by Forex Ratings, as well as information provided by the partners), including graphical information about the forex companies, brokers and dealing desks, is intended solely for informational purposes, is not a means of advertising them, and doesn't imply direct instructions for investing. Forex Ratings shall not be liable for any loss, including unlimited loss of funds, which may arise directly or indirectly from the usage of this information. The editorial staff of the website does not bear any responsibility whatsoever for the content of the comments or reviews made by the site users about the forex companies. The entire responsibility for the contents rests with the commentators. Reprint of the materials is available only with the permission of the editorial staff.
We use cookies to improve your experience and to make your stay with us more comfortable. By using Forex-Ratings.com website you agree to the cookies policy.