Some crypto traders stick to the HODL strategy and it works just fine for them. However, cryptocurrency trading is a risky career that requires quick thinking and making investment decisions in almost no time. Today, we want to show another side of the crypto world, where traders need to react to market changes within seconds and minutes. This article will discuss the particularities of the 5-minute scalping strategy!
What are scalping trading strategies
As you might have already guessed, this trading strategy takes its name from the frightful word “to scalp”. Traders who follow this strategy are known as “scalpers” because they quickly enter and exit the market but take the profit. The adopters of scalping strategies open from 10 to 50 short trades per day, depending on the trading pair volume. You can choose any crypto for scalping, including such giants as Bitcoin (BTC), Ethereum (ETH), ChainLink (LINK), etc.
Scalpers make a relatively low profit on all their trades. However, as their number increases, the final win amount also grows up. The scalping trading strategy targets small price movements and is particularly efficient due to the extreme volatility of the crypto market. Consequently, if you are trading a token that is not volatile, scalping strategies may be not profitable here.
The scalping strategy is built on fast-momentum trades, which means that investors who choose this approach should be experienced and skilled in risk management. In scalping, one needs to make investment decisions within minutes and sometimes even seconds. That is why this strategy might not work so well for crypto newbies or those who do not want to spend the whole day monitoring cryptocurrency charts and markets.
Scalping is not super risky as traders usually do not invest large amounts. Indeed, they make money on minor price changes. However, to avoid potential losses, it’s recommended to have strict exit rules.
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