Scalping is a trading strategy, where you can make profit with small price movement. scalping strategy in 5 minute is easy but risky also. Traders look for sudden and quick movement to enter and exit the market.
- Selecting a Liquid Market: You can do easily good scalping in high liquid market. such as Bank Nifty, Nifty 50, Sensex, and more options you have. High liquidity is necessary for quick order execution.
- Technical Analysis: Traders often believe on technical analysis and chart pattern to identify entry and exit points. You can use indicators for more confirmation like Moving Average (MA), Relative Strength Index (RSI), Bollinger Bands and more.
- Stop-Loss and profit: Scalper typically set tight stop-loss so that his losses remain within the limit. You find these levels when you are analyzing the market.
- Quick decision: In short time frame, you have to make quick decisions. For that you can use multiple screens and trading platform with single click execution.
- Risk management: you should always take risk with small percentage of their rading capital.
- Volume: Always monitoring trading volume for scalping. High trading volume often leads to better order execution.
- Events and news: Be up to dated with events and news releases hat can cause sudden price movements. That day may choose to avoid trading during such events or you should have specific strategy for trading.
- Practice: Scalping requires more practices.You have to keep practicing daily.
- Emotional control: Scalping can be emotionally challenging. Maintaining emotion control and discipline is important to avoid impulsive decisions.
- Continuous Monitoring: you need to monitoring your trade continuously. You should be prepare to exit your trade at any time as conditions change.
Scalping is very high stress trading strategy and this not for everyone. Because it requires much knowledge of market, technical skill, discipline, and ability to act quickly.
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