Scalping in Day Trading: Understanding the Methods, Pros and Cons
by: Ivan Cavric Scalping is a popular trading strategy in the world of day trading. It involves buying and selling financial instruments, such as stocks or currencies, within a single trading day in order to make quick profits. Scalpers aim to profit from small price movements and typically hold their positions for just a few minutes or seconds. There are several methods used in scalping, including: Trend following: This method involves identifying a trend in the market and then placing trades in the direction of that trend. Scalpers using this method will look for short-term price movements that align with the overall trend. Pros: It can be an effective way to capitalize on short-term price movements. Cons: Identifying trends can be difficult, and there is a risk of missing out on potential profits if the trend changes. News trading: This method involves taking advantage of market-moving news events, such as earnings reports or economic data releases. Scalpers using this method wil...