How Do Beginner Traders Crypto Scalp?

How Do Beginner Traders Crypto Scalp?

The market price of crypto assets is very volatile, many amateur traders are afraid to start investing in these instruments. To be successful in trading, a trader must have a good strategy to avoid big losses. Scalping is a great way to profit from trading crypto in the short-term by taking advantage of small price movements. How can you scalp successfully? More will be explained below!

What is crypto scalping?

Often referred to as micro trading, scalping is a trading method in which traders open large positions, and take profits on short price movements. Basically, this technique is done by buying a crypto asset when the price is decreasing and then selling it when the price is rising slightly. 

To earn more profit, typically, traders who employ scalping strategies trade using more than 70% margin in 1 transaction. This allows traders to earn a significant amount in a short time. However, to scalp, a trader must be able to predict price movements very accurately, in order to avoid suffering losses. Traders must act quickly in making decisions to sell their assets. This technique is more suitable for a trader who is diligent in monitoring crypto market price changes and also understands how the crypto market moves. Usually, they take advantage of volatile moments such as news releases.

How to Scalp Crypto

If you are a beginner and want to try scalping technique, then you must understand the methods to employ this trading strategy accurately. 

  • When trading, you need to pay attention to two points, namely the top point which is a benchmark for price increases, and the lowest point as a benchmark for price decreases. After deciding on these two price points, you can make a buying and selling decision when the market price has touched either one of these points. Basically, buy when the price goes down and sell when the price goes up.
  • Pay attention to the supply and demand of users in the market. A high demand will increase the market price, so it will be a good time to sell assets. Vice versa, a decrease in price is a signal to buy assets.
  • Leverage using margin trading so that your position is stronger when crypto scalping. The larger your trading margin, the easier it is for you to invest large amounts in the future.

Indicators for Scalping

These are some indicators that you can use when planning your scalping strategy:

  1. Candlestick Chart
    Market movements and crypto price information are usually described in the form of candlestick charts. The patterns formed by candlesticks can help you predict price trends. By understanding candlestick patterns, you can be more aware of what is happening in the market and also determine what is the right entry and exit points according to the technical analysis you have made.
  2. Exponential Moving Average (EMA)
    The EMA is a subset of moving averages used for a more timely indicator of price trends. This is done by paying attention to the exponential weight reduction of each market price or based on price movements in the previous period.
  3. MACD (Moving Average Convergence Divergence)
    This indicator depicts the price trend of crypto assets by showing the relation between the two moving averages derived from the price of the asset. The way to calculate MACD is by subtracting the 26-day EMA from the 12-day EMA. The results of these calculations produce a MACD line which serves as a signal to buy and sell an asset.

Pros and Cons of Scalping Crypto

Knowing the advantages of scalping, no wonder many traders are interested in doing it. Especially if you are someone who prefers low-risk trading because scalping strategies focus on profiting from small price movements. With crypto price fluctuations being very volatile, this strategy is safer because it was created to minimize potential losses from asset prices that tend to fluctuate.

The other advantage of scalping is that it forces you to diligently monitor price movements in the market. However, do remember, doing your fundamental analysis is equally important to avoid big losses. The trader must calculate carefully the difference between the buying and selling prices, and the transaction costs. This is important to ensure that the transaction costs do not outweigh the profits.

The drawback of the scalping trading method is the need for traders to continuously monitor market prices so as not to make mistakes in making decisions. The lack of fundamental analysis can be detrimental. It is not uncommon for traders who do scalping to end up with  a loss because they don’t earn enough profits to cover their entire capital.

Trading on Tokenomy

Are you interested in crypto trading? If you are still not convinced to try the scalping trading method, you can try out lower-risk crypto investments such as making deposits or stacking on Tokenomy Earn. It’s easy, you just need to register and verify your account. Once this is completed, you just need to make a deposit and choose the crypto asset you want to make a profit from through the two types of investments. You can also trade on TokenomyX and take advantage of the demo account feature to practice trading! Crypto investing in Tokenomy is easy and reliable! What are you waiting for? Register an account with Tokenomy now to start your crypto investment!

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