As I wrote in the previous article, I have decided to return to the scalping strategies. I have been intensively and successfully engaged in scalping years ago (in one of the articles I will share with you my results), but scalping strategies have their disadvantages, so I left them for a while. However queries are multiplying, so it’s time to look again at them and this time through the eye of the technology I am currently using :).
But first, let’s take a look at the pros and cons of scalping so each one can choose whether scalping is the right way for him. I am personally looking forward to this despite some disadvantages :).
Disadvantages of scalping
From my point of view, the biggest disadvantage is that it is very sensitive to slippage, spreads, etc. This is something that can be taken into the account when doing backtest, but in scalping it is still necessary to count with situations backtest cannot discover.
- Demanding development
Building strategies for scalping is more demanding. Usually, you need to work with trading sessions and some more advanced techniques. But don’t worry I will show you everything.
- Difficulties with the brokerage
Higher TF strategies work well with all brokers virtually. But when scalping broker must be really good and reliable.
Scalping strategies are much faster. When something goes wrong and the market is crazy, you can sustain a lot of losses very quickly. We must count on this and take it into our consideration when trading.
- Practical inability to do it manually
Scalping is fast and demanding, so you need to work really fast. It is practically impossible to do it manually unless you have a lot of time that means whole day. And you have a “gift” of great discipline and concentration.
The benefits of scalping
And now the main thing – what are the benefits?
- Potential Profit
The profit from scalping may be higher than in long term trades, but it is not the rule.
- Everything is fast
You know very quickly how the trade finished.
- It is fun
Trading with scalping strategies is simply much more fun, it is much wilder.
I have to say that I’m looking forward to it. First, I’m curious about the results, and then I remember the times when we did scalping. 5x a day came a message +500 USD, -200 USD … In short, it was fast flowing and there was big energy in it.:).
In the next articles, we will continue with scalping.