People ask me why I prefer scalping to day trading. After all, with both trading styles you have no open positions at the end of the trading day.
My answer is that scalping is more lucrative.
Day trading is about scanning the markets for opportunities, trading and waiting. The trade can last five minutes, a few hours, or more, but no longer than the end of the trading day.
Trading opportunities in day trading can arise from unusual circumstances, such as an overbought level on the daily time frame.
A scalper, on the other hand, naturally looks at minute charts.
He wants a quick profit, as quick as possible...
For a scalper, the ideal trade would have to take less than a minute.
Get in - take profit - get out.
What about slippage, the day trader may ask in his defense?
Slippage (when you get a worse price than you wanted) is one of the main criticisms of scalping. When the market moves too fast, slippage leads to poor execution. This leads to increased trading costs.
But slippage is a small price to pay in scalping.
Sure, it may cost you a little more here and there, but a scalper loves volatility. Volatility creates opportunity – which is much more important than slippage.
And what about the time spent glued to the screens? Scalping requires constant market watching, perhaps even on multiple screens, and it can be exhausting. That's one argument that opponents use.
No one said you have to trade all markets right away.
Trade 3-4 markets as a scalper. That is enough.
Small tip on the side: Focus on events with increased volatility potential.
For example, when inflation data is released in the United States. It is guaranteed that volatility will increase before, during and after the release.
So, by filtering out important economic events, you gain flexibility.
Wait a minute... Isn’t scalping just a technical trading style?
No.
Scalping works from both a technical and fundamental perspective. All that matters is that the market moves - who cares why?
So yes, I prefer to scalp: in, out – in, out.
What could be better than that?