Steemit Crypto Academy Season2-Week5 | The Scalp trading style

in SteemitCryptoAcademylast month (edited)

There are different trading styles that traders and Investors use in their Crypto trading venture. Each trading style depends on someone’s trading personality. If you are the type of trader who likes keeping track of the price movements while seeking to make those small profits in the shorter time frames for instance in seconds, 1 minute, 2 minutes, 10minutes, 30 minutes etc then you are a scalper. The maximum time they look at is 1 hour as they make their technical analysis of the different asset pairs in the Crypto trade market.

Scalp trading.png

Background image:Pixabay

Personally, I started out trading using the Scalping style though it’s not recommended for beginners. I opted for the scalping style because I liked the highly active price action in the lower time frame where you do not even want to blink an eye otherwise you might miss out on a profitable trade opportunity. Well, I am a bit of an impatient person who likes obtaining immediate results of what I am doing. That’s partly why I became a scalper as far as trading is concerned.

What is Scalping?

This is a trading style that involves investing money in Crypto asset pairs with the purpose of gaining smaller profits from the shorter price movements of a particular Crypto asset in the market. Scalpers take advantage of any short time buying and selling opportunities in the Crypto market. They collect any small profits from any profitable trades they make within the day.

Merits of Scalping

Lower risk of losing funds

Since they don’t hold trades for a long time they have low exposure to the Crypto market volatility. They do this by ensuring tight stop losses for all the trades they execute. In other words, they jump into a trade and quickly jump out when they anticipate that the trade may start going against them.

More trades and profit opportunities
These execute a huge number of trades in a day which can also imply more profitable opportunities in the Crypto market.

Demerits

Tiresome

The hundreds of trades that scalpers make in a day can mean to be so tiresome. Keeping track of every running trade, making quick entry and exist trade decisions for every trade can really strain your brain and eyes, making the scalping style a very tiresome style.

The high commissions and charges which end up eating up their small profits

Different brokers charge different commission fees from the trades. Due to the many trade positions, scalpers open up, they end up with a bigger commission fee to pay to the broker which ends up eating up their small profits gained from the small profitable trades made. For every trade opened up, it normally begins in negative and if it’s a big lot size used then it may long for that trade to get into profits or if it gets into profits, the profits will most likely be too small which may also be covering up the loss of some other bad trades of the day.

Missing out on certain profitable trades

Jumping out of profitable trades so early makes a scalper to miss out on the profits that he/she would have made from some particularly profitable trades.

The difference between scalping and other trading styles.

Scalping is done in shorter time frames whereas other trading styles like Swing trading are long term trading styles. A scalper can hold a trade for just seconds and minutes whereas a swing trader will hold a trade for a few days and weeks.

Scalp trading style eliminates greediness since it involves holding trades for a very short time whereas Swing traders are caught up in greediness since they seek to maximize all the profit potential of certain trades.

Scalping involves taking quick decisions since the trade execution is just done in seconds and minutes. There is no time to think too much about a particular trade whereas, with Swing trading, traders take their time in making trade decisions through the use of the different technical analysis tools, fundamental analysis and other trading strategies as a basis for their trading decisions.

ETHUSD.png
Screenshot: ETHUSD 5 minutes chart - taken from my MT5 PC trading application. Showcasing 2 moving averages 8 and 34 that used in the fingure-trap scalp trading strategy.

Requirements for scalp trading.

Shorter time frame

Scalpers need shorter time frames for their trading. As a scalper, the maximum time you are to look at is 1 hour in order for you to establish a major trend for the asset pair that you seek scalp trade in the shorter time frames.

A scalp trading strategy

There are many Scalp trading strategies that are perfectly fit for the scalp trading style and one of them is the finger-trap strategy that involves the use of moving averages such as the 8 EMA and 34 EMA coupled with other trade management elements including setting up a tight stop loss.

Quick decision making

Scalping requires quick decision making since a trader is seeking to make profits in just seconds and minutes following the quick price movements in the shorter timeframes. With scalping, you have to train your mind to think quickly, enter trades when you see an opportunity and exit at once in order to minimize the losses that might eat up the small profits made from other trades.

High leverage

A scalper needs higher leverage which enables him to open up a good number of trade positions at the same time. Though the higher the leverage, the higher the exposure to the risk of losing more funds if most of the opened trade positions go against you.

Automated trading robots

Scalp traders can opt for Automatic trading bots that can help them in the quick execution of the trades based on their programmed criteria of the trades execution. To some extent, these operate more efficiently than human beings. They can be purchase on Meta trader 4 and trading platforms. You can as well configure one using your knowledge of python and Javascript.

Homework task

Using the finger-trap Scalp trading strategy, practically demonstrate the scalp trading style on at least 2 crypto asset pairs such as BTCUSD, ETHUSD, etc

My expectations

  • Use a demo account for this exercise. You will need to create one using FXTM or any other trading broker of your choice. You may use an MT5, MT4 or trading view to execute your trades.

  • I expect you to explain the finger-trap trading strategy as you practically demonstrate all its vital elements on at least 2 crypto assets with clear screenshots.

Rules and Guidelines

  • Post your homework article in the steemit Crypto Academy
  • Only steemexclusive articles will be curated
  • Your article should range between 300 – 1000words.
  • Use an exclusive tag #yohan2on-s2week5 and also tag me @yohan2on so that I can easily find your article.
  • Clearly reference your work in case you have directly borrowed any content from other sources. Otherwise, be original and as creative as possible.
  • Plagiarism and spinning of other users’ articles will not be tolerated in the homework task. Otherwise repeat offenders will be blacklisted and banned from the Crypto Academy.
  • Use only copy-right free images and showcase their source.
  • To participate in this task, your reputation should not be less than 50.
  • Your article will not be reviewed nor curated if you are powering down at the same time.
  • You should have a minimum of 100SP to be eligible to participate in the Steemit Crypto Academy
  • This homework task runs till 15th/05/2021 (Saturday), Time: 11:59 pm UTC.
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Hello Professor @yohan2on, what about the Steem power that has been delegated ??
And I have the remaining 73 SP, thank

You should consider powering up some of your Steem and participate in the task @sayaalan

OK, thanks for the feedback

I see you have a total SP of 954SP in your account. You are eligible to participate.

I guess the minimum 100SP is the effective own SP. It is your own SP (not the delegated in), and it is effective (the delegated out is not counted). So if your own SP is like 150 for the example, then you delegated out 70SP which left you 80 and someone else delegated to you 100 SP which makes your effective SP 180, you still are not qualified. Because the SP counted is your effective own SP (80).

This is my understanding about this matter. You need to read also the course announcement by @steemcurator01 to understand better. The announcement is indivisible part to all courses in related week.

Good luck my friend. I hope it helps. I am new too to Steemit Crypto Academy.

Hello professor, Could I use two different crypto pairs? or we must use BTC/ USD and ETH /USD?

That's okay, you can use other 2 cryptocurrency pairs of your choice.

Hi Professor, I have installed FXTM but there is no option of crypto assets. There are just currency pairs. Can I use them too or we must use crypto assets. Please reply fast.

I would prefer you use Crypto assets. FXTM has crypto asset pairs. You just need to open a demo account with a virtual capital of at least $1000 then you will have access to the crypto assets pairs. Sorry for the late response. I see you have even already posted your article. It's okay, I will excuse you on that.

Amazing lecture Sir,I wanted to take part in Crypto Academy.Please guide me. How can I participate?

You need to raise your SP to at least 100, then you will be eligible to participate in the Steemit Crypto Academy.

You only need to read and write 😀

It's quite unfortunate my reputation isn't up to 50...will work hard to get there soon

Thanks for understanding the rules. With hard work, you will raise it up to 50 and more. Will see you soon.

Thank you for the encouragement...I will do my best.

Wow! This is amazing and i am happy to be eligible for the task, scalping style happens to be one of my usual trading strategy and i am glad the professor @yohan2on and @kouba01 has to bring it up this week,

Expect my entry...!!

I am looking forward to it

Hello, @yohan2on

Amazing lecture.

Thanks for the appreciation

Hello professor @yohan2on. You marked my homework for Steemit Crypto Academy Season 2-Week4 - Cryptocurrency Trading with RSI For @kouba01, I passed the mark but it’s not been curated which has paid out.

Amazing lecture sir. I was confusing scalp and swing trading strategies unless i went through "A scalper can hold a trade for just seconds and minutes whereas a swing trader will hold a trade for a few
days and weeks".

Use a demo account for this exercise.

Can't we use our real accounts?

Thanks
#affable

Yes you can use your real account.

Can I trade in Binance or any other crypto exchange ?

It's okay. So long as you show proof of your work with clear screenshots.

This week's lesson is so very interesting. Im into trading, but I'm active for now in the Philippine stock market. I will try my best to participate in this class and submit my homework. Thank you for this @yohan2on.

Hello again professor @yohan2on. This is my assignment for the week.

I put a lot of effort into it, I hope it meets your expectations.

https://steemit.com/hive-108451/@allbert/crypto-academy-week-13-homework-post-for-yohan2on-the-scalp-trading-style-finger-trap

Thanks professor @yahan2on for the educating lecture, here is my homework

Super busy this week with Eid festival as well.

But I will be posting my homework before deadline.

Hello @yohan2on, after reading your homework post, I thought it would be easy to do the task you've assigned. I was wrong. At some point, I was asking myself why I started it in the first place. Later on, I began enjoying what I was learning.

I have finally completed the task, you can find it here. Thanks for the challenge.

hello prof, for my homework, it hasn't been curated, tomorrow is the 7th day for payout, thanks

https://steemit.com/hive-108451/@robbee/crypto-academy-week-15-homework-post-for-professor-yohan2on-on-swing-trading