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Crypto Scalping Explained for Beginners

Scalping (also known as high-frequency trading) is a trading strategy where multiple deals get opened and closed within a very limited timeframe of several minutes or even seconds. Scalp trading is very popular with Forex traders, and it also seems to be extremely useful for trading cryptocurrencies. In this article, we’re going to explain how you can use scalping to make lots of money on the crypto market.

How scalping works

Scalpers aim to make profits from tiny movements in the price of a crypto asset. That requires such an asset to be highly volatile. Scalping transactions usually last just a few minutes, so the resulting profit may also be quite small. However, these small sums add up over time, resulting in significant earnings for a successful trader. Professional scalp traders open hundreds of deals every day. Some of them trade manually, others use automated trading bots.

Using a bot is quite convenient: they can monitor the market 24/7 without involving emotions that may lead to wrong decisions. Robots analyze data more effectively than humans, and they can make multiple transactions in just a fraction of second. But human traders have their own upsides: they don’t depend on pre-written algorithm, and that may be quite beneficial. There’re all kinds of technical analysis indicators that help them make objective decisions.

Scalping pros

Crypto scalping may be extremely profitable if you know how to do it. You can always find a suitable opportunity to use, even if you trade against the overall trend: market risk is practically non-existent in scalp trading. You don’t even have to know much about crypto — instead, you can just rely on real-time technical analysis. There are many well-tested strategies for scalping, and you can also make your own trading bot if you have the necessary skills.

Scalping cons

However, successful scalping requires investing lots of time and effort. You have to open and close trades all the time while keeping an eye out for commissions. Scalpers have to be experts in technical analysis and remain emotionally stable and focused. In order to earn a considerable amount of money, you’ll have to make hundreds of profitable deals every day or use leverage, which makes it much riskier.

Using scalping strategies for trading crypto may lead to great losses, so make sure to do some research and earn some experience with day trading before investing your money this way.