Are you a stock market trader? If yes, then this article is something that you can connect with instantly. There are no second thoughts about the fact that trading requires careful analysis of every aspect of market so as to make maximum profits. And if the aim is to make regular profits through Intraday trading, then you need to be even more attentive than ever. Here is one such intraday trading technique called Scalping that can help you to make better revenue and profits on a daily basis. Let us quickly get into the details of this amazing trading technique.
Also Read: How to pick Stocks for Intraday Trading?
What is Scalping?
To all those who are hearing the word for the first time, let us make it a bit clear. Scalping is a trading technique in which the trader buys and sells the commodities, securities, tickets, shares or foreign exchange multiple times in a single trading day in order to make smaller profits. The scalpers generally get involved in a trading activity for about 10 to 100 times in a day for making desired profits. Although, there are many other trading strategies that the financial traders get involved in but scalping remains one of the most lucrative one out of all.
If this sounds interesting to you, here is how you can do scalping and make profits from it. Read On
How to do Scalping and make Profits?
Scalping is not just a luck game where you enter the market, buy and sell the securities and make profits. It is actually a strategy where one needs to have decision-making skills so as to decide which instruments to invest on and which to release. Here are some of the ways by which you can do scalping in the best possible way:
- Train your mind: Your minds need to be trained in order to cope up with continuous market fluctuations. Before you step up into scalping, be sure about how you want to move if the trade doesn’t go favorable. Although, you need to move according to the movement of the market, still baseline your plan of execution.
- Select the right leverage: Scalping profit depends entirely on the type of leverage you select. Even if your broker provides higher leverage for scalping, do not get lured for it. Make sure that you understand that higher leverage can also result in bigger losses and can sometimes wipe up your trading capital. A low leverage of 1:5 is generally used in many scalping techniques.
- Trade small in the beginning: Rather than jumping to high volume trades, it is always recommended to begin trading with smaller quantities. Validate your strategy against small trades and then gradually scale up. With lower trading risks you will surely have a better peace of mind to execute your strategy initially.
Accurate Scalping Strategy for Forex/Currency Pairs
Our experience says Scalping is most suited for forex/currency pairs. There are two reasons behind it. First, currency market is most volatile, and second, you get highest leverage for trading currency pairs. Few brokers provide 100 times leverage for trading NSE currency futures. Having said that, we have observed that scalping strategies started working work quite well for equities and commodities too.
Let’s explore one of the very popular Scalping strategy known as ‘Infinity Scalper‘. We have tested this strategy on currency, equities as well as commodities. While it works equally good on forex/currencies and equities, we do not recommend this strategy for commodity trading.
The Infinity Scalper strategy was formulated by Karl Dittman, a well known name in financial markets. He has created many popular strategies such as FXEngima, PipsWizrdPro, SuperProfitScalper, DoubleTrendProfit, FastFXProfit and SuperTrendProfit.
The strategy works on 1 minute and 5 minute timeframes and very accurately predicts the price movements. Infinity Scalper is designed to work on MT4 platforms but can be easily translated into AFL with little programming knowledge. It is based on 2 popular indicators, CCI and Stochastic. The signals generated through this strategy never repaints. Checkout Infinity Scalper in action in the below chart:
There is an option to switch between 4 different trading styles; Conservative, Medium, Aggressive or Custom. Each trading style has a different set of risk management rules coded. Also, it has a special signal alert system which sends a push notification to your phone and an email alert to your inbox whenever a new signal comes up. Furthermore, a comprehensive user guide has been written to help you navigate through Infinity Scalper.
Tips to make Maximum Profit with Scalping
Here are some of the tips that you can follow to make maximum profit through scalping
- Always keep in mind to do small quantity trades initially but don’t make them too small to get unnoticed
- You can make the best profits through scalping if you are trading during the busiest hours. It is usually during first and last 30 minutes of trading hours
- Adopt the trading strategy where you can go long as well as short on trading instruments.
- Select liquid stocks for scalping which has high average trading volumes.
- Always have a fallback plan in place if the market suddenly takes unexpected turns.
- Keep a close eye on the financial news so that you don’t miss any of the major happenings in the market
- Never make decisions under stress. Keep your reflexes quick and go with your instincts while making trading decisions.
Also Read: Elliott Wave Analysis Excel Sheet
Scalping is no doubt one of the best trading techniques that can help the traders for making maximum profit. The only thing that you need to keep in mind is to be calm while you are trading and to make some quick yet effective decisions that can help you to turn the situation in your favor.