Fibonacci, fractals, RSI, CCI, Pitchfork Tool, Volume, Gap And Scalping Trading Tips And Tricks
A scalping trader is a speculative trader who aims to take quick and small size profit on the lower time frames. A scalper trader is a kind of day trader who aims to remain in a trade for few minutes not hours.
He or she is actively looking for momentum trading signals that will quickly turn into profit. A scalping trader also uses tiny stop losses that are often less than ten or fifteen pips.
Though it seems easy to add consistent tiny profits to one' s trading account, in reality, one ought to understand what it takes to become a clever scalping trader.
How To Become A Better Scalping Trader
1/ First one must set a target about the minimum profit one is expecting out of every trade.
That may be five or ten pips or more.
For example, one takes a trade, and it is now in profit of at least ten pips, one can close that trade or move the stop loss to secure the first ten pips. In that instance, all profits that are equal or superior to the target must be banked or secured.
There is no room for complacency.
2/ A scalping trader must be very selective. I have seen it before when a scalping trader is wandering in the financial markets. He or she must select liquid financial instruments that he or she enjoys trading.
A typical scalping trader loves to trade major stock indexes, major currency pairs, gold, silver, crude oil and blue chip stocks that are fluid.
3/ A scalping trader must have a time limit for each trade. A scalping trader is not a day trader.
Therefore, an average duration of fifteen minutes per trade is recommendable. The faster the trade is the better.
If a scalping trade is taking more than thirty minutes, one ought to take measures to vacate that trade or look for better scalping trading opportunities.
4/ A scalping trader must only trade during the first two hours when London or New York are open. On Fridays, a scalping trader will trade one hour and thirty minutes after the opening bell of both markets. A scalping trader can't afford to bypass those hours.
5/ A scalping trader must have sharper scalping trading tools. I mean a trading method that one has mastered and back tested. All scalping traders must use the common sense trend line, and trade the price action.
A simple scalping trading method will be 1/ Price exhibits a double bottom chart pattern. 2/ And the common sense trend line is broken. 3/ Then one buys for a rapid tiny profit (ten or fifteen pips)
a lower time frame.
1/Price exhibits a double top chart pattern. 2/ And the common sense trend line is broken. 3/ Then a scalping trader sells for a quick profit on 3M chart or another
lower time frame.
6/ It is recommended that a scalping trader uses the same stop loss for the same financial instrument throughout the trading session.
Though each financial instrument may require a unique stop loss, one must not exceed fifteen or twenty pips if one is really scalping. Just know that scalping is not the same as day trading.
Usually, a scalping trader will be using half of the stop loss needed by a day trader for the same trade.
Some scalping traders who trade on the one minute chart or ten second time frame use residual stop losses that are lesser than seven pips.
I am more of a day trader, but when I am scalping, I am scalping trade on the three-minute chart. I will not be scalping trade on time frames inferior to
7/ A scalping trader must never allow a winning trade to turn negative. One must be agile, and move the stop loss to break even as soon as the trade is in profit.
8/ A scalping trader must know and master his or her setups. Never come in without a scalping trading plan.
Know your setups and trade them day in and day out faithfully. Without focus and discipline, one can be floating like a wood in the sea of the financial markets. Be a scalping trader who is trading like a captain.
9/ A scalping trader is an excellent manager who controls the entry, exit, stop loss and profit. A scalping trader is a real decision maker.
For example, if one is scalping trade, and suddenly the market environment becomes more challenging, one can call it a day. End the trading session without blinking.
A scalping trader who is not adhering to the five percent money management rules will surely wipe the trading fund. Do not be a scalping trader who uses his salary at the end of each month as a trading fund, but build a fund for the scalping trading account.
After that follow the five percent money management rules. A salary or wage is not a trading fund. It is better to use a demo trading account to learn how to scalping day trade instead of wasting money.
The question now is who is a competent scalping trader? He or she is definitely not a swing trader or position trader. A scalping trader is a special breed of day trader who is a short term technical trader who mostly trades on 10-second, one minute, 3M and five-minute charts.
He applies the psychology of scalping trading, and tries everything to adhere to the discipline that comes with scalping day trading. The aim of this article is to help technical traders understand what it takes to become a professional scalping trader.
That is it. This is the end of this article about scalping trader. I hope it has been useful to you. If you really like it, then feel free to share it on the social media. Please use the social sharing button on this page.