Scalping is an activity of fast trading, based on opening positions of a few minutes duration and, in some cases, even a few seconds.
The scalper tries to exploit the smallest price movements and earn small amounts every closed position, the small sums at the end of the day will be a considerable earning (a scalper opens and closes 100 TO 300 positions per day).
As the activity of scalping can be highly profitable, some scalper can earn even 100% of their investments,anyway it is not easy to carry out this activity and it require cold analysis capabilities.
If you want to test yourself in order to become a scalper here are some basic rules to follow:
FOLLOW THE TREND
Very often we forget this small but fundamental rule that alone manage to increase significantly the odds in favor of the success of the investment. Follow the trend means opening positions when you are in the presence of a trend to rise and means opening sales positions when you have a trend to fall. Many are tempted to exploit the micro movements of fixing that, unfortunately for them, they last very little and are often a source of almost certain losses.
A lot of people make the mistake of thinking that they can predict a trend, unfortunately, this can't ever happen, except for fortunate cases in which you have the same possibilities offered by the case. The trend has to be ridden and, doing this, a good trader expects that it's formed, just doing so you can get the odds in favor, some will not be able to grasp the points of maximum and minimum, but who cares, at the end what matters is gain minimizing the risks.
SIZE LOSSES NOW!
Here's the weak point of every new trader, I would call it the "scourge" of the trader. Often, indeed almost always, when we see that our position is in loss, starts a mechanism of denial, enters the hope that the price turn back to previous levels e we hope to close at least break even. Unfortunately, this kind of approach leads to a constant loss inevitably, and sometimes fatal to the trader's wallet. The first thing you have to learn is the one that let you cut losses, if you size losses, you have the odds in favor always, if you don't do it, then it's as if you invest roulette.
PAY ATTENTION INTO SIDE PHASES
Some trades believe that these phases are extremely profitable, while others think that you shouldn't operate when the price is moving sideways, as always the truth lies somewhere in between. Operate during lateral market means predicting that the price, at any moment, could take a definite direction, therefore, should be taken in a hedging strategy using both vanilla or binary options.
Before opening a position you must fix the loss you can suffer. This loss is expressed in percentage terms. If we run the risk of 5%, in case of error we have 19 other chance to try again, if you risk 10% we will have only 9 possibility left, if you risk 20% we will have just 5.
THE STOP LOSS: A TRADER'S FRIEND
The stop loss is a feature offered by all trading platforms. Always try to put a stop loss before you even open a position, take in consideration the previous rule. Fixing a stop loss allows you to close your position automatically when the market goes against you, and this offers two advantages: It closes automatically a position if it's a loss of a certain amount specified by you and prevents your emotion from driving you to extend a loss.
CONCENTRATE YOURSELF AND BE CAREFUL
A trader, even though he spends many hours watching the charts, must have the mind alert and receptive, no sign of the market must escape to his analysis, so be sure to be ready to face the day's trading in an active way, avoid eating too heavy and drinking alcohol while at work.
THE DECEPTION OF FINANCIAL LEVERAGE
Financial leverage is a double edged weapon, if used lightly and negligently it can make you run out of capital in short time. Financial leverage multiplies the power of your capital, increasing exponentially profits, but also losses. For a novice trader it's perfect a financial leverage 1:10, ie, every euro you have on the account is worth 10 euro in the market.
I hope that you will do treasure of these precious advices and that you will always keep on mind that trading doesn't mean acting instinctively, but planning everything, both profits and losses. Don't forget, at last, the rule of discipline: " Size your losses and let profits run.. "