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Scalping Strategies III: Why scalping and what can be achieved?

19 Jun 2017,

I did not originally plan this article, but after a discussion I have decided to publish my results from the times when I had been doing scalping.

So what can be achieved with scalping?

First of all, I have to say here that by scalping we can achieve interesting profits, but it is very demanding and it is also about coincidences. In addition, it is often true that with higher potential profits, also the sensitivity to slippage, spread widening, etc. increases as we mostly aim for “homeruns”, strong moves of the market and high and quick profits. I was not different during my scalping times and within one year I had huge profit of 700%. It was really like riding a tiger, but the problem was that if the average slippage would have been 2 pips, my gain would be zero. I was extremely dependent to the broker and I did not like it.

What is important – there was no holding of losing positions until they are in profit, no martingale, no adding to the losing positions and so on. It was a strategy as it should to be, always reasonable stop loss, profit target, good RRR, reasonable win ratio etc.

The results were like this:

Profit 717% and DD 36%, within one year. It was very extreme and totally messy. I still remember the SMS that was coming with profits or losses :).

But what is important – to achieve such profits is very challenging. In the long term horizon, it is practically unreal. So you need to focus on other reasons why to do scalping.

Why scalping?

  • It flows
    It has big energy and power. In short, it is like riding a tiger, trades are short. It is quick and fast.
  • Adrenaline
    If something should not belong to trading, it is adrenaline. Trading should be “boring”. But men like to play and adrenaline belongs to scalping. So why not with a small portfolio.
  • Stability
    If we have a good broker, we can achieve better and more stable results thanks to scalping.
  • Greater variability of development
    This is probably the biggest benefit. Can you imagine to do trading in one-hour candles for example between 1-3 pm? I cannot, but I can imagine it on M1 or M5. The portfolio can be much more variable than with the higher TF, so we can simply “play” more.

 

Next time we will have a look at the practice.

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