Mastering the Art of Scalp Trading: Top 3 Essential Rules for Success

When it comes to handling trades, specifically for scalp traders who engage in rapid, short-term trading approaches, there are some crucial guidelines to follow.

Complying with these regulations can aid in reducing potential losses and increasing gains.

  1. Maintain discipline when it comes to stop loss: Once you have established your stop loss levels, do not change them. This principle will safeguard your funds by restricting the possibility of losses. Adhere to your original risk management strategy, and avoid making emotional choices that may result in greater losses.

  2. Establish a deadline for maintaining positions: Individuals who engage in scalp trading should strive for speedy gains and abstain from retaining positions for a prolonged duration.

    To illustrate, when examining a chart that displays data every minute, analyzing the data for 10 minutes should be ample time to assess the trade’s profitability. If the trade is not making notable advancement within this timeframe, it may be best to exit the position, regardless of whether it results in a draw, a slight win, or a minor loss. This technique decreases the risks of exposure to market changes and lets you shift your focus to the next trading opportunity.

  3. Avoid trading during volatile news events: It is advisable for scalp traders to exercise care and avoid trading in times of unstable news events that have a significant economic impact, including events like FOMC meetings, unemployment reports, interest rate announcements, or PPI releases.

    These occurrences may result in considerable fluctuation in the market and unforeseeable changes in price, posing a challenge to executing profitable short-term trades. To reduce the potential for harm, refrain from trading during such events and instead pay attention to times when the market is more stable.

To enhance the likelihood of success and proficiently handle trades in the fast-paced and risky trading environment, scalp traders can abide by the three stipulations.

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