For those of you who have just entered the world of cryptocurrency trading, of course you are still unfamiliar with the terms and various trading strategies, and one of them is Scalping.
We all know and realize how volatile the value of crypto assets is. However, this technique actually looks for profit opportunities from this, you know! Curious? Read the full article below.
What Is Scalping?
Scalping is a technique of buying and selling crypto assets in the short term to gain small profits. This method is carried out quickly, relying on price movements of an asset over a very short period of time so traders usually do not target large profits.
People who scalp or are called scalpers generally buy and sell assets in just a matter of minutes, or even seconds. This is done repeatedly with small profits until it eventually grows bigger because if you continue to make profits then the amount of capital used will automatically get bigger.
A scalper must be updated in receiving information because the opportunity taken is through increasing interest in an asset with high volume and good liquidity. Therefore, it can be said that scalpers depend on short-term events only which are caused by some external things such as news, pumping, or other things.
What is the Difference Between Scalping and Swing?
The most significant difference between the two is only regarding the duration or waiting time. Where someone can be said to be scalping when buying and selling assets in less than one day. Meanwhile, swing traders do it for a longer duration, such as daily or weekly, targeting bigger profits.
Because swing traders need to hold their positions for a longer time, they need expertise in knowing the ongoing trends in the market to get the right momentum within a certain time period.
Types of Scalping Methods
Scalping techniques are divided into two types based on how they are practiced in trading, here are the types.
1. Systematic Scalping
Systematic scalping is a scalping technique that follows a predetermined system. Usually, a scalper carries out analysis first and is assisted with all existing knowledge in determining the right time to enter and exit the market with the help of technical indicators,
There are also scalpers of this type who use trading bots to automate transactions.
2. Discretionary Scalping
Discretionary type scalpers are the opposite of systematic, so this method does not require a lot of effort because usually all decisions taken will only be based on the market dynamics they are facing at that time. Or in other words, this type of scalper is spontaneous regarding market conditions and tends to adjust market behavior.
However, it is still legal for discretionary scalpers to have a system or at least some analysis when trading.
The scalping technique is very suitable for those of you who are confident in your own trading abilities and especially those who like the art of trading. In fact, some people admit that scalper techniques make them addictive so that trading becomes more fun and challenging.
There are many platforms out there that provide trading demos so you can practice being a scalper. What are they? Minval will discuss it in another article!
