Scalping Trading: The quick trading strategy to multiply your daily profits

What distinguishes scalping trading from other investment strategies?

In the trading universe, there are three main approaches to seek profitability: scalping trading, day trading, and swing trading. The fundamental difference lies in the duration of open positions. Scalping trading is characterized by being the strategy where the trader opens positions with the goal of closing them in extremely short periods: from seconds to a few minutes.

Unlike day trading or swing trading, which allow for greater time flexibility, scalping trading demands almost full dedication during active market sessions. This methodology aims to concentrate gains on short-duration transactions, meaning you can generate multiple profitable trades in a single day.

Scalping trading represents the fastest way to both make and lose money in financial markets. The number of available entries will depend directly on the asset’s liquidity and the time you trade. The goal is simple but demanding: place a significant number of trades that generate incremental gains through small but consistent movements.

The four pillars that determine success in scalping trading

Before starting with scalping trading, it is essential to understand four critical factors that will condition your results:

1. Liquidity: Your best ally

Liquidity indicates how easily prices can vary according to supply and demand. The forex market is the most liquid in the world, constantly generating buy and sell opportunities. The higher the available liquidity, the more scalping trading opportunities you can execute, as you can trade both upward and downward price movements.

2. Volatility: The risk factor

While liquidity favors scalping trading, volatility plays an adverse role. Excessive volatility creates wide movements over short periods, exponentially increasing risk. Cryptocurrencies, for example, can experience variations of 200 USD or more within minutes, making scalping trading extremely risky in these assets if you lack experience.

3. Spread and commissions: The silent costs

All brokers apply a spread, which is the difference between the buy and sell price. For example, in EURUSD, prices could be: Sell 1.05430 – Buy 1.05424, generating a spread of 0.6 pips. These costs vary depending on the broker, and in scalping trading, they are a decisive factor. Smaller spreads and reduced commissions mean greater profitability opportunities.

4. Schedule: Strategic timing

The best time to practice scalping trading is when the London and New York markets are simultaneously active. During these hours, there is higher liquidity and price movement. The Asian session, in contrast, generates movements too small for effective scalping trading.

What are the ideal assets for scalping trading?

Considering the four factors above, the most suitable instruments for scalping trading are:

Currencies and indices: They offer high liquidity and low volatility. Currencies containing the US dollar (USD) combined with euro, yen, or pound are especially recommended for scalping trading. Indices, although with sessions limited to 8 hours, provide multiple entry opportunities.

Cryptocurrencies: Although they exhibit extreme volatility, experienced traders can leverage their considerable liquidity and 24/7 availability. However, they require wider spreads precisely due to that inherent volatility.

Assets not recommended: Individual stocks have short sessions with limited liquidity, drastically reducing scalping trading opportunities. Most only generate buy signals, limiting strategic flexibility.

Essential technological tools for scalping trading

Executing scalping trading requires specific infrastructure:

• Live chart platform: You need access to real-time quotes without delays. Charts should display candles of reduced timeframes, preferably 5 minutes or less, never exceeding 15 minutes.

• Direct connection to the broker: The trading platform must connect directly to the broker’s servers to allow order placement in less than a second.

• Robust internet connection: Poor speed could delay your orders by several seconds, completely ruining your scalping trading strategy.

• Appropriate computer equipment: It does not require advanced features but must be reliable and free from deficiencies that slow down your work.

Fundamental technical indicators for scalping trading

Each scalping trader develops their personal style, but these indicators are common references:

Exponential Moving Average (EMA)

Shows the trend of the quote by calculating the average price over a specific period. Scalping strategies suggest executing an entry each time two EMAs of different periods cross, generating signals of trend change.

Relative Strength Index (RSI)

Identifies trend changes by measuring impulses in price variations. When RSI exceeds 70, the asset is overbought, signaling a selling opportunity in scalping trading. An RSI below 30 indicates oversold conditions, suggesting a buy entry.

Stochastic

Works similarly to RSI but measures trend duration. Critical values are at 80 (sell overbought) and 20 (sell oversold), providing different signals that complement scalping trading analysis.

Moving Average Convergence Divergence (MACD)

Identifies trend changes by measuring divergence and convergence between two moving averages. Each line crossover provides a trading signal for scalping, indicating buy or sell moments.

Executing scalping trading: Step-by-step practical example

Let’s take an example with EURUSD where prices are: Sell 1.05430 – Buy 1.05424.

To practice scalping trading, you would buy at 1.05430 (sell price) expecting the quote to rise. You will set a lot size of 0.01 contracts, risking 2% of your capital (2 USD on a 100 USD account).

The operation structure:

• Stop loss at 1.05230 (loss limit)
• Take profit at 1.05630 (profit target)
• If the price reaches 1.05630, the trade closes automatically
• Gains generated: 20 pips equivalent to 2 USD

Now your balance is 102 USD. This scheme allows placing more than 10 similar trades in a day through scalping trading, generating a 2% return per successful trade.

The psychological requirements that determine success in scalping trading

More important than any tool or indicator, the mental factor is decisive in scalping trading. This includes:

• Discipline self-control: Maintain the scalping trading strategy without deviation, regardless of consecutive gains or losses.

• Optimal capital management: Precisely define what percentage of your balance you will risk per trade (lot size), how much you are willing to lose (stop loss), and what profit you seek (take profit).

• Emotional management: Losing streaks can erode your confidence to enter subsequent orders. Winning streaks can make you abandon the scalping trading strategy, operating with more risk than allowed.

• Resilience to adversity: A single poorly sized trade in scalping trading could wipe out the gains of 3 or 4 previous winning trades.

Advantages and disadvantages of scalping trading

Advantages

• Lower overall risk due to the extremely short timeframes of each trade in scalping trading.
• Potential for amplified gains through multiple daily trades.
• Possible diversification across several currency pairs simultaneously.
• Complete autonomy: you control your scalping trading operations without relying on third parties.
• Immediate results: you get feedback in minutes, not days or weeks.

Disadvantages

• Extreme concentration required: some days with low liquidity will limit scalping trading opportunities.
• Significant commissions: brokers charge percentages on trading volume, directly impacting scalping trading performance.
• Exhaustive dedication: practicing scalping trading during the New York session requires almost 8 hours daily in front of screens, which can be psychologically exhausting.
• Cumulative stress: three or more consecutive losing trades in scalping trading can cause severe stress and impact future decisions.

Do you have the profile to practice scalping trading?

Before committing, honestly answer these questions:

What are your specific financial goals with scalping trading? How much capital are you genuinely willing to lose without affecting your daily life? Can you dedicate at least 6 hours daily analyzing charts during London or New York sessions?

How do you react to adversity and unexpected successes? Do you have true discipline to maintain your scalping trading system without deviations?

If you answered affirmatively and have money that will not negatively impact your financial priorities, you have the profile to practice scalping trading. However, discipline is more crucial than initial capital.

Final recommendations to start with scalping trading

Theoretical preparation: Master concepts like pip, lot size, leverage, spread, liquidity, volatility, commissions, buy stop, buy limit, sell stop, sell limit, take profit, and stop loss before trading.

Practice on a demo account: Before investing real money, create a demo account to experiment risk-free. This phase is crucial to develop confidence in scalping trading.

Advanced technical analysis: Study tools like Fibonacci, supports, resistances, and trends. These complement the mentioned indicators and reinforce your scalping trading strategy.

Broker evaluation: Carefully compare offered conditions: spreads, commissions, execution speed, and reliability. These factors will directly determine your profitability in scalping trading.

Continuous learning: Even as a profitable trader, stay constantly updated. The market evolves, and your scalping trading strategy must adapt.

Conclusion on scalping trading

Scalping trading is not a quick path to wealth: it requires fierce discipline, technical preparation, and psychological stability. Not everyone will make money practicing scalping trading, and some will lose their investments entirely.

However, if you meticulously follow each recommendation, practice on demo accounts, develop your personalized scalping trading system, and demonstrate genuine patience, you will discover that this approach can generate consistent returns. Scalping trading is challenging but achievable for those who are truly committed.