Scalping is an intra day strategy that aims to gain with fast market movements, both buying and selling. Operations can take minutes or even a few seconds, depending on the objective outlined for the operation. For those who carry out daily market trades, scalping is a powerful way to earn a lot of money by buying and selling shares in the short term, but it requires constant monitoring of market movements to know the best time to enter and exit the operation.
A scalper, meant for anyone using this strategy, enters and exits the market very quickly. The objective is to find opportunities to make quick money with a high volume of daily operations.
The technique is used in several segments, ranging from stock exchanges, futures, crypto-actives and even sports betting.
Scalpers traders mainly use the reading, interpretation and graphical analysis of markets. Keeps focus on the order flow, analyzing the order book and the teams and trades. Thus, he can take advantage of fast movements, which can often mean a profit when buying on the bid (best buy order) and selling on the ask (best sell order).
Advantages and Disadvantages of Scalper
Scalping, like any stock trading strategy, has its advantages and disadvantages. Knowing the pros and cons before entering the market is the difference between making or losing money.
One of the main advantages of the scalper is not worrying about scoring. By mastering the scalper technique, it is possible to find opportunities for quick gain. Thus, you can make money even in unfavorable market scenarios.
Another advantage is to operate in short periods of time.
The biggest downside to scalping is the brokerage costs. Sometimes fees can greatly affect the profit made from operations. Because each operation has brokerage and taxation costs.
In taxes, the sum can reach 20% of the profit. That's why it's important to research the fees applied at the brokers beforehand so you won't be surprised.
Another disadvantage is the difficulty in receiving dividends. As the scalper does not spend much time with the shares, he does not become a shareholder.
If you are a beginner in the stock market know that this technique requires knowledge, a lot of study and a lot of practice. Whoever dominates the market manages to have good results and significant profits.