Would you like to learn about the bestscalping strategy that thebest traders are using to take home massive profits? We often hear about all the money you can make by scalp trading stocks. But what about scalp trading crypto? In today’s lesson, you’ll learn how to scalp trade cryptocurrency using our favorite crypto analysis tools.
We are going to share with you, from our combined wealth of experience, what it takes to scalp trade for a living, and hopefully, by the end of this trading guide, you’ll know if you have what it takes to succeed in this business.
First and foremost, when scalp trading, it’s essential to have a structured approach and a rule-based strategy. The same as swing trading or positional trading you are not going to trade every day, and you’re not going to make money every day. So, you need a scalp trading cryptocurrency strategy to protect your balance.
The high volatility nature of Bitcoin and other cryptocurrencies has made the crypto market like a roller-coaster. This is the perfect environment for scalp trading because during the day you’ll have enough up and down swings to make a decent profit.
Moving forward, we’re going to teach you what you need to learn how to scalp trade cryptocurrency and we’re going to share some out-of-the-box rule-based scalp trading strategies.
How to Scalp Trade Cryptocurrency
The crypto market’s unique characteristics require you to have a firm understanding of how it works. Otherwise, your experience can be like skydiving without a parachute.
The good news is that we’re going to provide you with everything you need to survive scalp trading crypto.
Scalp trading the cryptocurrency market can be a very lucrative business because of the high volatility. Since the crypto market is a relatively new asset class, it has led to significant price swings.
Before scalp trading Bitcoin or any other altcoins, it’s prudent to wait until we have a high reading of volatility. The good news is that even when we have a low reading of volatility relative to other asset classes, this volatility is still high enough that you can generate a modest profit on your trades.
Scalp trading crypto also requires the right timing and good liquidity to make precise entries.
Most crypto traders approach the market from a gambling paradigm. They have no quantified method, and if they do have one, they can’t get themselves to follow it. In fact, 90% of all traders lose 90% of their investment within the first 90 days of trading. This is a complete review of Bitcoin Equalizer, a trade analysis software.
Bitcoin Equalizer aims to change that status quo. It is the leading automated analytics tool for crypto traders and was built by a team of professionals who understand the challenges crypto traders face.
Bitcoin Equalizer works in a very straightforward way. Think of it as your digital mentor on your journey to crypto success. You feed it with information and within seconds it starts working for you–it helps you understand your method and become a better trader.
They provide crypto traders with the tools and insights they need to effectively manage risk, improve profitability, and avoid becoming part of the 90/90/90 statistic.
The software has a sleek interface and is very simple to use. No math skills are needed here, Bitcoin Equalizer does all the heavy lifting in the background and generates complete trade analytics reports showing you exactly how your strategy and performance are evolving over time.
Bitcoin Equalizer is your ally on your way to consistent profitability in the market. Let it help you find your edge, and improve your profitability.
A lot of the cryptocurrencies and crypto exchanges are very illiquid and don’t have the liquidity to offer instant execution that you might find when trading Forex currencies.
Before scalp trading Bitcoin or any other altcoins, it’s also important to check how liquid the cryptocurrency you wish to trade is. You can do so by simply verifying the 24-hour volume of the crypto trade.
CoinMarketCap is a good free resource to read and gauge the market volume of any particular coin.
Note* Always remember that not having enough liquidity could lead to substantial slippage and subsequent to bigger losses.
As previously stated, scalp trading crypto doesn’t require trading every single day. We only like scalp trading cryptocurrencies when all the conditions align in our favor. In this case, avoid trading on weekends and limit trading only on the highest-volume days.
Put your seatbelt on because next, we’re going to reveal how professional traders are scalp trading cryptocurrencies.
The Best ScalpTrading Strategy
The idea behind crypto scalp trading is to look for trading opportunities that offer you the potential to make a quick profit. If scalp trading suits your own personality, let’s dive in and get through a step-by-step guide on how to scalp trade cryptocurrency.
Now, before we go any further, we always recommend taking a piece of paper and a pen and note down the rules of this scalping strategy.
In this article, we’re going to look at the ‘buy’ side.
As previously discussed, the number one choice you need to make is to pick coins that have high volatility and high liquidity. If you’re not scalp trading Bitcoin, which is the most liquid coin out there, and you like the altcoins, try to pick those coins that have good liquidity and volatility.
There are more than 1600 coins on the market and growing. By following only the top cryptocurrencies, you’ll reduce your area of selection.
Scalp trading smaller cryptocurrencies can also be a very lucrative business, but there are higher risks. Remember, crypto prices can crash just as fast as they have risen.
Moving forward, you’re going to learn how you can make money scalp trading crypto.
This specific scalp trading strategy uses one simple technical indicator, namely the Money Flow Index. We use this indicator to track the activity of the smart money and to gauge when the institutions are buying and selling cryptocurrencies.
The preferred settings for the MFI indicator are 3 periods.
We’re also going to alter the default buying and selling levels from 80 to 100 and from 20 to 0 respectively.
How to use the IMF indicator will be outlined during the next step.
An MFI reading of 100 shows the presence of the big sharks stepping into the markets. When buying, they really can’t hide their footsteps. They inevitably leave tracks of their activity in the market and we can read that activity through the MFI indicator.
Technical indicators aren’t always right, so in order to fine-tune our scalp trading strategy, we’ve added a few more conditions. Namely, during the current day, we need to skip the first two MFI readings of 100 and study the crypto price reaction.
The price needs to hold up during the first and second 100 MFI reading.
If the price drops after the first two MFI 100 readings, then this suggests that most likely we’re going to have a down day.
We can now wait for the third MFI reading above 100. It doesn’t necessarily have to be the third MFI = 100 reading, you can take every other MFI = 100 readings. If your time doesn’t allow you to catch the third 100 reading on the MFI indicator, you can simply pick the next one as long as all the other technical conditions are satisfied.
Next, we also need the candlestick when we got the MFI = 100 reading to be a bullish candle. The close of this candle needs to be near the upper end, giving us a candle with very small wicks.
This brings us to the next important thing that we need to establish when scalp trading cryptocurrency, which is where to place our protective stop loss and where to take profits.
Hide Your Protective Stop Loss Below the Day’s Low. Take Profit During the First 60 Minutes After You Opened the Trade.
The obvious place to hide your protective stop loss is below the low of the day. A break below it will signal a shift in the market sentiment, and it’s best to get out of the trade. This can also signal a reversal day.
We’re more flexible when it comes to our exit strategy. However, the only rule you need to abide by is to take profits during the first 60 minutes or the first hour after your trade got triggered. Holding the trade longer than one hour will result in a lower success rate. At least that’s what our backtested results showed us.
Conclusion – Crypto Scalp Trading
If you took the time to read the whole scalp trading crypto guide, then you should be able to buy and sell Bitcoin and alts and make some daily profits. If you are interested in learning how to scalp trade cryptocurrency, be sure to equip yourself with enough information before diving into the market.
Crypto scalp trading can be a great way to grow your crypto portfolio and it’s a very lucrative alternative to the holding mentality that it’s crippling the crypto community.
Making a living scalp trading cryptocurrency can be a lot easier due to the high volatility nature of the crypto market. High volatility suits scalp trading very well, so you have the right environment to succeed.
Thank you for reading!
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