Scalping: The most demanding trading strategy. Complete guide to short-term trading

What is scalping and why is it different?

In the trading universe, there are three main approaches: scalping, day trading, and swing trading. The fundamental difference lies in the duration of positions. Scalping is the mode where traders open and close positions on very short timeframes, seeking to accumulate multiple small gains throughout the trading session.

Unlike long-term strategies that depend on overall trends, scalping requires being present during the session. It is simultaneously the fastest path to profits or losses. The liquidity of the chosen asset and the trading hours will determine how many real opportunities you have each day.

The premise of scalping is simple but exhausting: execute dozens of daily trades that generate small profits in windows lasting minutes or seconds. It’s not easy money, but it’s not impossible if you have the right fundamentals.

Essential requirements before starting

Trading with this strategy demands more than just theory. You need three concrete components:

Appropriate technological tools:

• A platform with real-time updated charts without delays, showing reliable quotes (there are multiple options available in the market)
• Analysis in candles of 5 minutes or less, maximum 15 minutes
• Direct connection to broker servers with minimal latency to place orders in less than a second
• Stable internet connection and equipment with sufficient specifications

Operational skills:

• Speed in decision-making
• Quick pattern analysis
• Deep understanding of the asset you trade

Mental factor (the most critical): The psychological aspect surpasses the importance of tools and technical knowledge. It’s about mastering your self-control, maintaining unwavering discipline with the strategy regardless of immediate results, managing capital intelligently, and defining clear risk parameters per trade.

You must establish: risk percentage per trade (lot size), maximum tolerated loss (stop loss), and target profit (take profit).

The four pillars that define success in scalping

1. Liquidity: Your best ally

Liquidity represents the supply and demand of an asset. More liquidity means easier transactions without drastic price movements due to your activity. The forex market is the most liquid globally. The higher the liquidity, the more opportunities to buy and sell smoothly.

2. Volatility: The risk factor

While liquidity favors scalping, volatility can be an adversary. Large price movements over short periods create uncertainty. Cryptocurrencies illustrate this perfectly: Bitcoin can vary by 200 USD in minutes.

3. Spread and commissions: The hidden cost

The spread is the difference between the buy and sell price. If EURUSD quotes at Sell: 1.05430 – Buy: 1.05424, the spread is 0.6 pips. Each broker applies different spreads and commissions. For scalping, smaller spreads increase your profitability.

4. Timing: Timing is everything

The best moments are when London and New York operate simultaneously. The Asian session generates movements so small that scalping becomes unproductive.

Recommended assets vs. problematic assets

Ideal for scalping:

• Currency pairs (especially with USD): EURUSD, GBPUSD, USDJPY
• Major indices: offer high liquidity and predictable movement

These markets operate Monday to Friday, present constant liquidity, and controlled volatility.

Problematic for scalping:

• Stocks: limited sessions (8 hours), variable liquidity, few selling opportunities
• Cryptocurrencies: extreme volatility but tradable 24/7 with high spreads

If you gain experience, cryptocurrencies could become your best scenario.

Technical indicators: The analysis tools

Exponential Moving Average (EMA)

Reveals the overall trend and the average price over a specific period. Common strategies point out opportunities whenever two EMAs of different periods cross.

Relative Strength Index (RSI)

Measures changes in momentum by identifying trend shifts. RSI above 70 suggests overbought (possible sell), while values below 30 indicate oversold (possible buy).

Stochastic

Similar to RSI but with different interpretation. Shows the probable duration of the trend. Overbought at 80, oversold at 20.

MACD (Moving Average Convergence Divergence)

Generates trend change signals through line crossovers, allowing identification of buy or sell moments.

Each trader develops a preference for certain indicators. Practice determines which works best for you.

How to execute a scalping trade: Practical example

Using EURUSD with quote: Sell: 1.05430 – Buy: 1.05424

Suppose an account of 100 USD where you risk 2% per trade (2 USD). You aim for a 1:1 profit-to-loss ratio (win what you risk).

Execution:

• Volume: 0.01 lots
• Entry: 1.05430 (sell price)
• Stop Loss: 1.05230
• Take Profit: 1.05630
• Result: Closes at take profit at 1.05630
• Profit: 20 pips = 2 USD
• New balance: 102 USD

Each profitable trade generates a 2% return. With 10+ trades possible daily, the accumulation is significant. But each loss also subtracts 2%.

Real advantages of scalping

• Limited risk: Short trades minimize exposure
• Multiple opportunities: Dozens of trades daily increase potential income
• Diversification: You can trade multiple assets simultaneously
• Autonomy: You have full control over your decisions
• Immediate results: Gains or losses are known within minutes

Challenges you will face

• Constant concentration: Requires 6-8 hours daily glued to screens
• Cumulative commissions: If you make 20 trades daily, costs multiply
• Psychological stress: Losing streaks erode confidence and discipline
• Dependence on timing: Days with low liquidity limit opportunities
• Temptation to deviate: It’s easy to break the strategy during euphoria or frustration

Do you have the profile to be a scalper?

Before starting, answer honestly:

• What are your real financial goals?
• How much money are you willing to lose without affecting your stability?
• Do you have 6+ hours free daily during London or New York sessions?
• How do you react to adversity and pressure?
• Are you genuinely disciplined or tend to improvise?

Being a scalper requires sacrifice. Your mind must withstand consecutive losses without abandoning protocols. You need money that you won’t allocate to basic needs. You must tolerate unproductive days without losing patience.

If you back your discipline with real-time practice, solid mental management, and careful capital handling, then you have potential.

Learning guide before trading with real money

Theoretical phase: Study fundamental concepts: pip, lot size, leverage, spread, liquidity, volatility, commissions, buy/sell stop/limit orders, take profit, stop loss.

Initial practical phase: Create a demo account. Experiment without real risk. Here you make mistakes without financial consequences. Practice placing fictitious trades until decisions become automated.

Complementary technical analysis: Master supports, resistances, trends, Fibonacci, and the indicators described.

Broker selection: Compare spreads, commissions, platform speed, and minimum deposit conditions.

Continuous updating: Even profitable traders keep learning. The market constantly evolves.

Conclusion: Realities of scalping

Scalping is not a guaranteed path to wealth. Many traders fail. You can lose all your capital, sometimes more if you ignore loss limits. Some brokers automatically close positions before the account goes negative.

If you apply each recommendation rigorously, practice patiently on demo, and develop resilient mental discipline, scalping can become a steady income source.

The difference between winners and losers is not luck: it’s discipline, preparation, and methodical execution.