How can you determine the best time to use a scalping strategy? (2024)

Key takeaways from this article

• Assess market conditions:

  Before scalping, evaluate liquidity, volatility, and the market trend. This helps to ensure quicker, cost-effective trades with fewer risks in favorable environments.

• Set defined limits:

  Use predetermined stop loss and take profit points. This strategy allows for better performance during rapid movements by managing risk and securing gains efficiently.

This summary is powered by AI and these experts

• Bill ho*rter Writer/Editor-at-Large of Legal Content…

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  I used scalping techniques for many years as a Forex institutional trader. In FX, the liquidity is massive, widely traded, and readily accessible. The trick to intraday scalping - or quick execution of trades in a two-sided strategy - is to not violate your CORE long or short position, but to book profits using technicals to get in and out quickly. It is also useful if your base positioning in any particular currency pair IS correct, then your scalping results are normally going to yield positive returns (ie: in a bullish run that you have predicted by your position, selling into retracements and buying them back quickly will work very well. If they do not, you should re-position). Short time frames and a quick trigger-finger, no regrets.

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• Jigar Pandit

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  Scalping as a nature is a risky product. Risk associated is huge if the strategy is positional. Second thing to consider is price interval, means at what difference scalping can be executed. Third, execution plays critical role, means (execution time and type of order whether market order or limit order). Unless you don’t have algorithm platform for execution, scalping is not possible. All the above points are in addition to liquidity.. If low liquidity is not substantial(one to two tick difference) then scalping is not advisable.

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  Qual o seu volume financeiro?Qual o tamanho usado, de volume financeiro, em sua estratégia?Qual o nível de escorregamento que você aceita?Comece respondendo essas questões.Pois uma estratégia que opere 1000 contratos onde o mercado esteja com somente 300, por nível de preço e zero escorregamento: falta liquidez para a estratégia. No entanto, se você aceita que 3 tickets serão ok, então não vai faltar liquidez. E se forem 50 contratos num mercado de 100, por nível de preço? Mais fácil e sem escorregamento. Lembrando que o princípio do scalping é entrar e sair rapidamente. Então o processo é relativo, complexo e depende cada um vê no mercado. E você como enxerga a estratégia de scalping?

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• Mike Douglas Futures Trader at Mike Douglas

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  Scalping futures is my bread and butter and I trade it daily the best advantage of scalping is to see the real-time volume distribution which is only available in the futures market, if one can understand delta and is proficient in reading the DOM and the footprint you can literally buy when buyers are buying and sell when sellers are selling scalping and stay out of market noise, use a 2:R risk to reward and trade 5 mins after the New york open or during the cash close where you will find lots of scalping opportunities.

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• Andres Rioseco Aravena Chief Market Strategist

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  Liquidity and volatility are the most important factors in a sound scalping strategy. On one hand, liquidity determines the ability of market participants to fill their orders. So if liquidity is too low, the risk for a scalper is greater. On the other hand, extreme volatility makes market participants less likely to trade, thus reducing the amount of liquidity in the order books and pushing market makers to widen their spreads. This results in higher costs for scalpers and higher risk. So, the best context will be the one with moderately high volatility and good liquidity. These apply to most scalpers, both HFT and non-HFT.With regard to tools, I think order flow monitoring and zero latency are kings

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• Gary Norden Trader and Trading/Financial Markets Consultant.NN² Capital

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  While it is true that higher volatility markets create more opportunities there are still ways to trade in more stable contracts. Scalpers will need to make adjustments depending on market volatility. They should learn ways to trade in both because they will likely face both during their career.

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  Ao implementar uma estratégia de escalpelamento, os traders devem considerar tanto a volatilidade quanto a liquidez do mercado. Um mercado volátil e líquido oferece o ambiente ideal para o escalpelamento, proporcionando oportunidades abundantes para lucros rápidos e eficientes. No entanto, em mercados com baixa volatilidade ou liquidez, os scalpers podem enfrentar desafios significativos e devem avaliar cuidadosamente os riscos envolvidos antes de prosseguir com suas operações.

  See Also

  Using the 5-8-13 EMA Crossover for Short-Term Trades | ChartSchool5 Ways to Avoid Slippage in TradingThe Best Times for Scalping Forex

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• Michael Kawaletz Energieeinkauf | Marktanalysen | Energiebeschaffung | Börsenhandel | Coaching

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  Volatility is indeed important, but it should be supported by strong liquidity to avoid the risk of slippage and failed trades. Anyone who has tried to scalp the NQ Future knows exactly what I'm talking about. :)

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• Zoila Zubieta Campos Scrum Master 📈📊 | Application Analyst IT 💻

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  It's necessary to be prepared for fluctuating events that can affect the incomes of the businesses. By using scalping we can ensure that even in the hardest times there will be earnings to go through month by month.

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• Mohan Vamsi Budata CSPO® Product Management | Deep Learning| Gen AI | Cloud Data Engineering | Databricks | Apache Spark |Low Code | Ex - HCL

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  While Volatality is a good for scalpers, there is always huge risk when the trade position is not on the correct side and there is also the risk of price reversalsBelow conditions needs to be strictly followed, which gives us clear confidence on our trades1. Predefined Stoploss2. Position Sizing3. Targets

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• Gary Norden Trader and Trading/Financial Markets Consultant.NN² Capital

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  I would disagree with this. There are ways to trade both trending and ranging markets. Scalpers shouldn’t concern themselves with such technical definitions. Sometimes trending markets can be hard to get filled in ( they can be too one-way)

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• Arpit Beri Operations Analyst at Zerocap | Portfolio Analyst | Ex- NAB | Ex- ANZ | Ex- Delta Blockchain Fund | MBA- Finance| Cryptocurrency Trader

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  Scalping trends is a very healthy wave to make profits when you are riding rather than fighting the trend.Key tools used can be Fibonacci levels, RSI/ any other leading indicators, cumulative spot volume delta/ etc and a candlestick chart.

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  The best time to use a scalping strategy is during periods of high market liquidity and volatility, typically at the opening and closing of major financial markets. Additionally, economic news releases and events can create short-term price movements, offering opportunities for scalping.

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• Anmol Rana Associate Analyst | Mozaiq Automation | ex. Federal Bank Ltd. | CA Inter (May 25) | MBA | Finance | NCFM I.A.P.M. | Lovely Professional University

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  Trend follows a pattern Wait and watch the pattern Draw a trend line Wait for the price to move away from the mean line (trend line)Take a trade for the price to come back to that level….

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  A tendência do mercado é outro fator crucial para o escalpelamento. Em um mercado com tendência clara, seja de alta ou de baixa, o scalper pode seguir a direção do movimento de preços e negociar com o momentum, o que favorece a obtenção de lucros. Por outro lado, em um mercado variado, onde os preços oscilam dentro de uma faixa, o escalpelamento pode ser menos eficaz devido à maior incidência de sinais falsos, chicotes e reversões. Portanto, é preferível realizar operações de escalpelamento em mercados com tendência definida, onde as oportunidades de negociação são mais claras e consistentes, proporcionando um ambiente propício para a obtenção de lucros rápidos e eficientes.

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• Gary Norden Trader and Trading/Financial Markets Consultant.NN² Capital

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  Again, the opportunities presented in both are different. Experienced scalpers may find some good opportunities in quieter or out of hours market conditions

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• Michael Kawaletz Energieeinkauf | Marktanalysen | Energiebeschaffung | Börsenhandel | Coaching

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  Certainly, one should trade only during the cash session. Specific indices or commodities experience peak liquidity at particular times. Conversely, there are moments when it's advisable to cease trading, like the final 15 minutes in the ES Future, due to options hedging activities that can render movements unpredictable.

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• Mohan Vamsi Budata CSPO® Product Management | Deep Learning| Gen AI | Cloud Data Engineering | Databricks | Apache Spark |Low Code | Ex - HCL

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  Trading Session are big moments for Scalpers1. Opening and Closing2. Overalp time of Indian and UK markets (IST 12:15 to 12:45)Volatality is the friend for traders

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• Navid Ramezani کارشناس سرمایهگذاری

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  A remarkable observation I have made is that for certain currency pairs, the overlapping session of the London and Frankfurt markets constitutes a dormant period.

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• Vincente Cabrera Propulsion tech @ Space X🚀// Best market structure analyst in the business For the NASDAQ(funded)📉📈📊

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  Different market sessions offer unique opportunities for scalping. For instance, the overlap between the London and New York sessions in forex markets often sees increased volatility and liquidity, making it an ideal time for scalping.I prefer NY for my personal taste as I only focus on NQ

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• Gary Norden Trader and Trading/Financial Markets Consultant.NN² Capital

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  Agree and I would add that scalpers need to operate at a high level of focus and intensity. It can take time to build to this level.

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  Here are the most powerful Scalping methodes:1. Price Action Scalping2. Scalping with Moving Averages3. Scalping with Bollinger Bands4. Scalping with Stochastic Oscillator5. Scalping with Fibonacci Retracements6. Scalping with Breakouts

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• Tiong Ghee Nio Management of Operations and Development

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  Ultimately, scalping is just determining "What is my exit strategy?"Entry is like taking off in an airplane....many can do it.The next question is of course, "How do I land that same airplane I just took off in/How do I exit?"Even rollercoaster rides have a fixed time from start to finish. So for a trade:1. Do I hold for minutes?2. Do I hold for hours?3. Do I hold until a specific target is hit?4. Or do I hold until a stop is hit?There are so many questions one can ask to determine a "trading style". I propose the best way to discover what trading style suits one is from a "tabula rasa", a clean slate. Scalping can reveal one's true trading character.Don't adopt styles that are counter "you". Inevitably that just kills you.

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• Michael Kawaletz Energieeinkauf | Marktanalysen | Energiebeschaffung | Börsenhandel | Coaching

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  In scalping, indicators or oscillators are not used. Scalping is too short-term for lagging indicators to be of any use. Scalping is the purest form of trading, and the order book is a scalper's best friend. Footprint charts, absorption, imbalances, delta, and delta divergences, as well as stop runs, can be clearly identified and require quick reactions. The major advantage of scalping is the immediate market feedback on whether one's position is correct or incorrect. And since positions are not held overnight, one can sleep well.

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• Vincente Cabrera Propulsion tech @ Space X🚀// Best market structure analyst in the business For the NASDAQ(funded)📉📈📊

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  Scalping can be adapted to suit different market styles, whether it's ranging markets or trending markets. For instance, scalping within a tight range during consolidation periods or catching quick momentum moves during trending phases.

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• Mohan Vamsi Budata CSPO® Product Management | Deep Learning| Gen AI | Cloud Data Engineering | Databricks | Apache Spark |Low Code | Ex - HCL

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  In my experience i use Volumes and Price Action as leading indicators for my Scalp trades. Volume higher than the average for a specific period of time will give better opportunity make a quick scalp1. Volumes2. Price Action3. Directional Momentum Index4. Bollinger Bands (To Identify the range on the timeframe0

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• Ricardo Velazquez Reclutador en BTCC | Licenciado en Administración de Empresas, Recursos Humanos, Cryptocurrency, Trader, CFDs, Commodities

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  yo uso una combinación de acción del precio con retroceso fibbo, es importante que la plataforma vaya siguiendo los precios de los activos a la par del mercado

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• fxevans fegi financial analyst/trader in the foreign exchange market.

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  For me, the scalping strategy and approach should play a decisive factor in the choice of trading tools. Generally you need a combination of simple indicators that are quick in spotting and identifies tradable setups.

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  1. High Trading Volume/Momentum2. Quick Reactions3. Discipline and Patience4. Low Profit Margins5. Risk Management6. Market Liquidity7. Psychological Well-being

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• Sachin Sarvade Senior Derivative Analyst @Sharekhan | NISM-Series-XV: Research Analyst Certified| 10+ years of Market Experience

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  Determining the optimal timing for employing a scalping strategy involves careful analysis of market conditions. Look for high-volume trading periods, like the opening hours of major markets, where price movements are frequent and predictable. Also, consider factors such as tight spreads and low transaction costs to enhance profitability. Staying informed about economic events is crucial for making informed decisions. #ScalpingStrategy #MarketAnalysis #TradingTips

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