Any trader looking for success in the stock market needs a blueprint to follow. Trading strategies are as varied as the assets being traded on the markets. However, they all revolve around two core principles — risk management and maximizing returns.
Scalping Trading Strategy Basics
If you’re the kind of investor who is looking to grab a small profit fast and move onto the next opportunity, then scalping or scalp trading could be a great trading strategy for you. Using this method, you would be making quick trades multiple times per day, cashing out your positions the moment they become profitable, and then doing it over again and again.
Scalping has become a leading short-term trading strategy put to good use by both retail and institutional traders. For one, it exposes traders to less risk while offering them more trading opportunities. It also helps them fight greed since they’re only targeting quick small returns. This strategy doesn’t allow for participants to hold a stock for long periods, so they have to enter and exit the trade in a matter of minutes and sometimes even seconds. That being said, there are certain exceptions to holding stocks for a few hours, which will be discussed further in this article.
The Benefits Of Scalping
Executed properly and on a good trading day, scalping delivers a number of key benefits that continue to make it one of the most popular trading strategies today. These include:
- Limited Risk — Scalping involves tight profit-taking and stop-losses, which in turn limits the risk of loss from any single trade. This makes it appealing to entry-level traders and those with very conservative risk appetites.
- Easy to Automate — It is often easy to automate your scalp trading strategy with trading systems since they are mostly based on a series of technical analysis criteria that can be computed.
- Non-Directional — Scalping doesn’t require the market to move in a specific direction before you can make a profit. Pretty nifty, right?
Over time, the small profits you earn on each trade can quickly add up to something that puts a genuine smile on your face at the end of a trading session. However, you should also note that you will be paying a commission for each little trade. These costs can add up as well, so make sure you’re not using an expensive broker for scalping trades!
Succeeding at Scalp Trading
Unlike today’s employment environment where people are expected to work 8 hours per day in order to earn constant paychecks, the stock market doesn’t reward the time that you put in. Instead, it rewards knowledge and strategy. Knowledgeable traders record some of their most profitable trades within a few hours. The bulk of the time is put in to study and finetune the trading approach. As a trader, it also wouldn’t hurt to get your hands on some tried and tested techniques that you can leverage for every single trade.
I’ve recently discovered the Market Master course from Trader X at DayTradingTheChart.com. It’s a fantastic place to get started with scalp trading. To succeed at scalping, you need to be on the lookout for attractive liquidity and volatile instruments, while making sure to be hot on timing. Essentially, you don’t want to wait for the market as you focus on closing losing trades as soon as possible. This course is designed to help you navigate the market and stay on top of your scalping trading strategy.
How the Market Master Course Can Help You Master Scalp Trading
Like the name suggests, Market Master teaches an amazing technique that is perfect for mastering the market every day. It not only shows you how to scalp the market all day long, taking up to 20 ticks per trade, but you can use the technique in any market, from stocks and currencies to bonds and futures. Some of the key things you’ll learn include:
- Chart trading: Scalpers, especially beginners, often find themselves overwhelmed with the volume of indicators, Level 2 quotations, price actions, and Time & Sales indexes. These are all important for a successful scalping strategy, but what if you could do without them? Market Master shows you how to scalp by trading the chart alone.
- Easy to understand candlesticks: One of the easiest ways to get the hang of price movements is through the Japanese Candlestick Chart. With this course, you will learn how to read candlesticks, measure their individual high and low bars, so you can take profitable action. Remember, scalping revolves around buying low and quickly selling as soon as the trade turns a profit. The idea here is to be able to use these bars to predict price movement so you know whether to go long or short on your next entry.
- Optimal trading intervals: With scalping, you want to get in and out quickly and move on to the next opportunity. The Market Master course teaches you how to read each candlestick bar at specific time intervals for optimal trading probabilities. By understanding high trading probabilities, you are able to improve the low risk vs reward ratio that is common with scalp trading. Of course, you’ll also have to consider the instrument you’re trading and how active that market is, but with Market Master, you can easily gain 5-20+ ticks with each trade.
To see this course in action, check out Trader X’s Youtube channel and follow his journey as he attempts to use this technique to transform $40,000 to $1 Million. Grab the Market Master course today to help you focus on making every trade count and succeed at scalping through the various markets.
“Day Trading The Chart” also offers other tried and tested trading techniques — Big Trade and Easy Entry, but Market Master is the ideal course to give you a solid foundation for these other courses.