Guides on how to scalp crypto are important to know, especially for novice traders or for those of you who are just delving into the world of crypto digital assets.
It’s because scalping can make traders able to reap millions of rupiah in profits instantly. In addition, you can maximize profits by using this method.
Crypto scalp trading is a strategy traders can use to make a profit. The trick is to take advantage of small price movements.
To find out more about this method, check the full review below!
What is Crypto Scalping Method?
As mentioned above, the crypto scalping method is a trading strategy that can help traders make short-term profits.
This strategy allows traders to earn small profits from relatively small price movements, because traders using this method usually trade as much as possible in a short period of time.
The strategy is to combine small profits to eventually add up to a sizable profit. This method requires traders to act quickly and not spend time making decisions.
Scalper or scalp traders refer to traders who use this method will usually act when there is an increase in interest in certain assets reflected in high volume and good liquidity. Therefore, scalpers will rely heavily on short-term events that drive an increase in interest on certain assets, which is caused by a number of external factors, such as news, pumping, and others.
Is Scalping Safe and Legal in Trading?
So, is this method safe and legal in trading?
Basically, this method is quite safe and legal. In fact, this method are often used by individual and institutional investors.
However, there is no cheating loophole in this method. So far, scalping is still a subject of debate (pro-con) among traders. However, it also has its advantages and disadvantages.
With scalping, traders can reap profits without having to learn more about the fundamentals of an asset. In this case, the trader only needs to constantly monitor the price movement of an asset.
However, the drawback is that this crypto scalping requires careful calculations so that traders do not suffer from losses. Often times the profits earned are used up to pay commission fees for each trading session.
How to Scalping Crypto
Regarding how to do crypto scalping, there are three strategies known by traders.
The first strategy is market making. This condition occurs when traders try to capitalize on the difference in the price of an asset by continuously making bids and offers.
The second is to buy the asset in large volumes and resell it when there is slight price movement. This can be done without having to do the market making process mentioned earlier.
The third is carried out by traders by exiting the market when the risk to profit ratio is in the 1:1 position (one to one).
Methods That Can Be Used in Scalping
There are several methods that can be done in the crypto scalping as follows:.
1. Range Trading — Crypto Scalping Method
Range trading has become a popular method for scalpers. This strategy involves price movements between high and low levels over a certain period of time.
The lower and upper limits on the movement of crypto assets price are known as support and resistance. Traders will usually buy when they reach the support limit and sell after breaking out the resistance limit.
The greater the frequency with which the price touches one of the levels, the more likely that level will be broken. Therefore, this method can work well for short-term traders because even if a breakout occurs, traders can still make stop-losses.
Meanwhile, the main tools used in this method are the support and resistance limits shown by the candlestick chart of the desired crypto asset .
2. Bid-ask Spread
The bid-ask spread is a method that takes advantage of the difference between the bid and ask prices. Here, scalpers can earn money from the gap between the two.
3. Leverage — Crypto Scalping Method
This next method refers to the number of traders who strengthen their trading margins. A number of scalpers are known to use the leverage method to increase their portfolios.
Indicators Used For Scalping
The following are indicators used for scalping.
- Candlestick Chart
For information, this chart will present all information related to the price of crypto assets in the crypto market. If you use this pattern, you can set the right entry and exit points as well as perform technical analysis. This one pattern will form various shapes and charts, which can help you predict future market trends.
- EMA
EMA or exponential moving averages are part of moving averages that are commonly seen as a more precise indicator of price trends. This indicator uses an exponentially decreasing weight from the previous price/period.
- MACD Indicator
MACD or moving average convergence divergence is a momentum indicator that describes the price trend of a crypto asset by showing the relationship between two moving averages of the asset’s price.
The MACD is calculated by subtracting the 26-day exponential moving average (EMA) from the 12-day EMA. The calculation’s result of the two EMAs will be the MACD line.
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