Through trading, traders can earn a big sum of money. As a result, they can change their lifestyle. To trade smoothly, different types of traders use different types of styles. Scalping is one of them. However, many experts suggest traders not choose to be a scalper. Because, they think, by choosing quick scalping, it’s not possible to go a long path. But, being a scalper, if you can make the right decision, you will get good outcomes. Because, in terms of scalping, you can do numerous trades regularly. As a result, you might get more opportunities to earn money.
To help you, in this post, we’ll demonstrate the seven rules for scalpers. We think it would help you to make money through quick scalping. So, let’s know about these.
Minimize the use of indicators
Technical indicators help traders to get the opportunity. Some indicators are mostly used by traders. Such as Relative strength index, stochastic, moving average, Bollinger bands, Fibonacci retracement, and so on. However, being a trader, if you try to use so many indicators, you will face trouble. Because, in quick scalping, you need to focus on small trends of the market. So, if you become overloaded with too much information, you may face difficulties.
Use lower stakes
As the scalpers get the chance to open more positions in a single day, they need to lower their margin amount. Otherwise, they might face trouble. Actually, there is a common rule in terms of taking a risk. Being a trader, you should not try to take a risk of more than 2 % of your capital. For example, if your account balance is $1000, you should not exceed the margin amount of more than $20. Bear in mind, to trade constantly, you need to keep low stakes. As a result, you may not face a huge loss. Even if you trade with the professional brokers like Saxo, we strongly recommend to use lower stakes.
Most of the time, scalpers start overtrading. And so, they face a big loss. Actually, in trading, it’s not possible to keep the success rate 100%. So, to become successful, it’s important to minimize the loss. However, to lessen the loss, being a quick scalper, you should use the stop-loss which is close to the bid/asks the price. By the way, as you will not hold the trade for a long time, if you see, you’re going to lose your trade, you just need to close the trade with minimal loss, and moving on to the next trade.
Select appropriate timeframe
The scalpers don’t choose the longer timeframe as they place ten trades every day. Normally, experts suggest scalper use the 1-hour chart. But, being a scalper, you should use the 15-minutes, 5-minutes, and 1-minute chart. Without being sure about the current trend, you shouldn’t use the 1-hour chart. In scalping, traders need to aware of every single movement of the price. That’s why they need to always keep their eyes on the market.
Use the master specific strategy
In terms of long-term trading, you may easily understand, which strategy is appropriate. But, in scalping, as you will place many trades, so, it’s really difficult to find out which strategy will work and which will not. That’s why most of the time, amateurs avoid quick scalping. The traders who are masters in trading strategy, prefer to become a scalper. Because, by using the right strategy, they can make money. However, some popular strategies are used by the pro traders. They are candlestick patterns and trading after the announcements of major financial news.
By the way, if you want to face the winning streak, you should try to apply these techniques. Now, as you know about the basic rules of scalping, you just need to choose the right broker. Some brokers penalize the scalpers if they place more trades than a particular number. So, make your choice consciously. Or else, you may face difficulties.