Cryptocurrencies came to bring sweeping changes to the traditional finance ecosystem. However, despite their revolutionary tag, they had to interface with trading strategies from the other world in a bid to fuel adoption. One of the trading approaches fished directly from the traditional world, forex to be precise, is scalping.
Those without a forex trading background may wonder what is forex scalping. They may even think it’s a forex-only thing. Forex scalping is a profit-pumping method used by traders to conduct a quick trade to increase the profit margin.
A scalper is keen on small profits. As such, they open and close multiple positions within 24 hours with a single trade lasting between seconds or a few minutes.
Scalping positions can be leveraged, allowing a trader to enter a larger position using small funds. In addition, the strategies used can be automatic or manually induced. Note that going down the manual lane requires a trader to manually interact with technical signals and be physically present throughout the trading period. With automatically-conducted strategies, a trader specifies the parameters and leaves the software to handle trading complete with entry and exit points.
Even though the trades last a few seconds or minutes, a strategy is needed. Fortunately, the scalping world’s full of scalping plans. If divided into groups, they make up the trend, countertrend, range, and statistical techniques.
If you’re asking whether scalping strategies in forex can apply in the cryptocurrency field, the answer is a big yes. Before we get on the how, let’s look at the why. From our previous discussion, we’ve come across many features that we can relate to, especially in the strategies.
For example, in the currency space, just like in forex, prices have an upward and downward movement. In addition, crypto prices have a resistance area, a support level, and there’s data for statistical-tabulation to reveal patterns based on day, price, time of day, among factors.
So, how do we shift scalping strategies in forex to become scalping strategies in crypto? Well, it’s easy and effective. However, since the practice is ideal for use in high liquidity markets, it makes sense to apply it to Bitcoin trading since the king crypto has the highest liquidity in the cryptocurrency market. Ethereum is another virtual asset that’s second in liquidity and a second-best bet for crypto scalpers.
Assuming that Bitcoin and Ethereum are within your reach and you want to dive into scalping, the journey takes five hops.
The risks experienced when using scalping strategies in forex are imported to virtual currencies. However, the plan is advantageous in the crypto scene because it’s low-risk, and when the right process is automated, it effortlessly earns profits for the crypto scalper.
Although forex scalping strategies are applicable in crypto, it’s not for everyone. New traders may find the process so complicated that they prefer holding (buy and hold investment). The trading approach is NOT for:
But, if you have all the above qualities, it’s high time to try out or perfect your cryptocurrency scalping skills.
BitTrade is a professional cryptocurrency scalping terminal for traders and investors.
The tool is available as a beta version at the moment.
© 2020-2021. All Rights Reserved
Feel free to reach out to us for further questions via email@example.com