A trading strategy that generates several profit potential on the small price changes is termed as ‘Scalp Trading’. Intra-day traders implement this strategy anywhere from 10 to couple hundred trades. In spite of the small movement of stock price, Scalping requires trading focus with discipline.
Here are the reasons mentioned why Intra-day traders follow scalping:
I. Scalping is a short-term kind of day trading as traders seeks low risks by trading in a single day. Also, the scalping provides small gains per successful trade.
II. These small gains can be obtained through Stock trading tips through technically analysis like as moving averages, MACD (Moving Average Convergence Divergence), momentum oscillators etc
III. Scalp traders can set-up 100 trades (or more) on per day basis as a result they have large number of trading opportunities.
IV. Because the positions are held for short span of time, there is less possibility for traders to quit the trade; which is a beneficial stock trading tips which also allows closing the trade without waiting too long.
V. Generally, the scalper take profits at 1:1 risk reward which work as a gainful equity trading tips in order to achieve higher strike rate.
I. It’s recommended that intra-day scalpers must have two trends as this will make scalping more skillful to achieve success rate.
II. Intra-day scalpers must know the chart trend as well as the intra-day time frame which they use for support & resistance. They can take help through effective equity tips to know the trend.
III. Trader should be aware that despite of having intra-day trend down, there is the possibility of bounce at strong intra-day support levels; till the daily chart trend is up.
IV. A scalper can buy strong intra-day support level for the small bounce.
V. For the scalpers, it’s good to have a discipline to trade strategically & thoughtfully.
Being an intra-day trader, you must have a win/loss ratio as winning and losing trades are equal in size. Despite of having short term kind of trading, it is a very challenging aspect for generating capital.