There are many styles for trading cryptocurrency. However, finding the one that works for you is not easy. By trial and error, every trader either finds one or creates one (combining several styles at once, depending on assets and goals). Trading on the crypto market can be called a peculiar struggle between "bears" and "bulls", except that the price of one asset falls and grows several times during the day. The essence of such small market fluctuations appears most vividly when scalping strategy is used. The scalping strategy is especially popular with traders because of the quick deals and getting quick profits.
Scalping is an active trading strategy that can be very profitable if trades are executed correctly. The strategy implies opening orders for a short period (from a couple of seconds to several hours). It is possible to choose both the level of desired profit, and the time during which the deal will remain open. It is possible to open and close several orders at the same time.
This is quite understandable: traders who use "scalping" trading style mainly trade derivatives with high levels of leverage. Ratio of profit to risk is quite low, but the positive effect is achieved by the number of trades.
There are two basic approaches to using scalping strategies: pure scalping and variation scalping.
Traders who only practice scalping in their work. Experienced traders try to use proven scalping strategies or develop their own ones and test them on demo accounts to increase profitability.
Traders are not solely scalpers and use different trading tactics but from time to time they trade using scalping strategies. This can happen, for example, during long consolidations – the price has no definite direction and wide trading range. In this case short-term transactions are opened when the necessary corrections appear.
Scalping is quite an aggressive type of trading requiring great preparation. It differs from other types of trading by a high percentage of transactions with high risk. The trader-scalper has to analyze the market well enough to make all deals profitable. That is why it is important that the percentage of profit from successful trades exceeds the percentage of losses from unsuccessful ones. Competently choose the tools and methods of trading on the market according to your goals and terms.