Scalping: Capturing Small Price Movements
Executes rapid trades to capture very small price movements with tight risk control.
What is Scalping?
Scalping is a high-frequency trading strategy that aims to profit from small price changes. Scalpers make dozens or even hundreds of trades per day, holding positions for just seconds to minutes. The goal is to accumulate many small profits that add up to significant gains over time.
Key Characteristics
Very short holding periods: Seconds to minutes. High trade frequency: Many trades per session. Small profit targets: Often 0.1% to 0.5% per trade. Tight stop-losses: Quick exits on losing trades. High win rate required: Typically 60%+ to be profitable.
When to Use Scalping
Scalping works best in highly liquid markets with tight spreads. It's most effective during periods of high volatility when prices are moving quickly. However, it requires intense focus, quick decision-making, and low trading fees to be profitable.
Risks and Considerations
Scalping is one of the most demanding trading styles. Transaction costs can quickly eat into profits, and the psychological pressure of rapid-fire decisions can lead to burnout. It's generally recommended for experienced traders only.
Practice Risk-Free
Master these concepts with paper trading before risking real capital.
Start Paper TradingDisclaimer: This article is for educational purposes only and does not constitute financial advice. Trading involves significant risk of loss. Cryptocurrency investments are volatile and high-risk. Always do your own research before making any investment decisions.