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#Thread on Scalping.
Lot of New traders are getting attracted towards Scalping Nowadays. For obvious reasons of course. Faster moves, Faster Profits. I get it why. But, Do they really understand the implications that come with it & what it can lead to if not done right.
Lot of New traders are getting attracted towards Scalping Nowadays. For obvious reasons of course. Faster moves, Faster Profits. I get it why. But, Do they really understand the implications that come with it & what it can lead to if not done right.
Scalping is a trading style that specializes in profiting off small price changes, generally after a trade is executed and becomes profitable or results in small loss.
Simply, Entering & Exiting a trade just to Encash a few points in favor.
Simply, Entering & Exiting a trade just to Encash a few points in favor.
Just Be aware, it's not Scalping if you're using it as an excuse for 'Not being able to hold onto a winning trade' or 'Not letting the profits run.'
Only you're your own bullshit detector..
Only you're your own bullshit detector..
Essential Factors For Scalping.
- Faster Live-feeds & Faster Order Execution.
- Liquid instrument (Be it Cash, Futures or Options)
- Liquid Spreads.
- Aggresive Entries n Exits
- Managing Psychology after Frequent trades.
- Realising if Scalping is reached at Overtrading stage.
- Faster Live-feeds & Faster Order Execution.
- Liquid instrument (Be it Cash, Futures or Options)
- Liquid Spreads.
- Aggresive Entries n Exits
- Managing Psychology after Frequent trades.
- Realising if Scalping is reached at Overtrading stage.
1) Selecting Instrument.
(Cash, Futures or NF/BNF Options)
- Should've decent volume & Volatility.
- Liquid Spreads
Gap Between Bids n Asks & Consecutive orders.
- If Spread is not Liquid, Scalping will go wrong & Slippages will be bad enough to ruin those small Profits.
(Cash, Futures or NF/BNF Options)
- Should've decent volume & Volatility.
- Liquid Spreads
Gap Between Bids n Asks & Consecutive orders.
- If Spread is not Liquid, Scalping will go wrong & Slippages will be bad enough to ruin those small Profits.
2) Identify the most sensitive price areas where maximum action can happen within seconds. This includes Demand n supply zones, VWAP, Trendline S/R, imp moving averages, Opening range highs n lows, Psychological levels at IMP Options Strikes.
3) Aggresive Entries & Exits.
To avoid Mkt order slippages, Better find Aggresive Entry with Limit order instead of market order. Also, Plan for Probable Exit point & Place (Realistic) Profit Booking order.
More the Aggresion in Entry Exits, More the Probability of Gains.
To avoid Mkt order slippages, Better find Aggresive Entry with Limit order instead of market order. Also, Plan for Probable Exit point & Place (Realistic) Profit Booking order.
More the Aggresion in Entry Exits, More the Probability of Gains.
4) Managing Psychology in between Frequent Scalps.
- This is Probably the most imp factor. We may do a few frequent successful scalps but one bad trade can take it all away & then the Psychology fucks up & What follows after is the worst nightmare of a trader. Overtrading.
- This is Probably the most imp factor. We may do a few frequent successful scalps but one bad trade can take it all away & then the Psychology fucks up & What follows after is the worst nightmare of a trader. Overtrading.
There is only 1 way to overcome this,
DISCIPLINE..!!
Be ready to Accept the SL Hit, As much as u want to hit the target. This minimises impact of loss, which will help in 'Not screwing up' next trades.
More on Overtrading here on my Previous thread. https://twitter.com/jagtaparun007/status/1192816636094484480?s=19
DISCIPLINE..!!
Be ready to Accept the SL Hit, As much as u want to hit the target. This minimises impact of loss, which will help in 'Not screwing up' next trades.
More on Overtrading here on my Previous thread. https://twitter.com/jagtaparun007/status/1192816636094484480?s=19
5) Averaging or Pyramiding wouldn't be a good idea for a scalper. Instead use Partial Profit (or loss) booking Method.
It's a scalper's paradise if Scalp trade gets converted into a Trending one & instead of Pennies, it becomes multibagger.
(Talking about NF/BNF Options)
It's a scalper's paradise if Scalp trade gets converted into a Trending one & instead of Pennies, it becomes multibagger.
(Talking about NF/BNF Options)
