Scalping: The fast trading strategy and how to master it as a beginner

Are You Really Ready for Scalping?

Before diving into the world of scalping, you need to ask yourself some uncomfortable questions: What are your real financial goals? How much capital can you afford to lose without affecting your life? Do you have 6 to 8 hours daily in front of screens? Can your temperament withstand streaks of consecutive losses?

The uncomfortable truth is that scalping is not for everyone. It requires steel mental discipline, dedicated time, and risk capital. Many traders fail not due to lack of knowledge, but because of psychological weakness. If you are someone who abandons their rules when emotions rise, scalping will ruin you quickly.

Understanding Scalping: Real-Time Operations

Scalping differs from day trading and swing trading mainly in one thing: the duration of positions. While swing trading can last days or weeks, scalping seeks profits in minutes or even seconds. It is the fastest way to make or lose money in the markets.

The essence of scalping is placing a large number of small trades during the session, taking advantage of minimal price movements. If you execute the strategy correctly, you could perform more than 10 trades daily, each generating 1-3% return on your account. Multiply that by the trading days, and you’ll see the appeal of this technique.

The liquidity of the asset and trading hours determine how many opportunities you’ll have each day. Not all assets are suitable for scalping.

The Technical Pillars You Need to Master

Liquidity: Your Best Invisible Ally

Liquidity is how easily you can enter and exit the market without impacting the price. The forex market (currency exchange) is the most liquid in the world. EURUSD, GBPUSD, and USDJPY are pairs with abundant buyers and sellers, perfect for scalping.

The higher the liquidity, the more entry and exit opportunities. Without liquidity, your orders get stuck in huge spreads.

Volatility: The Silent Enemy

Here’s the paradox: you need price movement, but not too much. High volatility (like cryptocurrencies) can be deadly for scalpers. Bitcoin can rise or fall 200 USD in a minute, destroying your risk-reward calculations.

Indices and currencies offer controlled volatility, perfect for capturing movements without devastating surprises.

Spreads and Commissions: Hidden Costs

Every broker charges via spreads (difference between buy and sell price). In EURUSD, you might see: Sell 1.05430 - Buy 1.05424. That 0.6 pips is what the broker keeps.

With 10+ trades daily, these small percentages add up. A bad broker can take 30-40% of your profits. Compare spreads before committing.

Trading Hours: The Golden Window

The best time for scalping is when London and New York markets operate simultaneously (8:00-12:00 EST). During the Asian session, prices move so slowly that scalping becomes practically impossible.

Choose your schedule carefully. If you live in Latin America, New York hours mean long early mornings.

The Best Assets for Scalping

Ideal: Currencies (especially USD pairs), indices like S&P 500 — all with high liquidity and moderate volatility.

Risky: Individual stocks (limited liquidity) and cryptocurrencies (too volatile). Cryptos CAN work if you’re an expert, operate 24/7, and have tolerable spreads.

Essential Tools for Trading

Without these, you’re trading blind:

• Chart platform with live data: TradingView or others with minimal latency. 2-3 second delays ruin trades.
• 5-minute or shorter candles: Scalping lives in small timeframes; never use 1-hour candles.
• Fast connection to your broker: A fraction of a second can mean the difference between profit and loss.
• Decent hardware: You don’t need a supercomputer, but it can’t be a 5-year-old phone.

Indicators That Work in Scalping

Exponential Moving Average (EMA)

Shows the current trend of the price. Many traders generate signals whenever two EMAs of different periods cross. Example: 5-minute EMA crossing 12-minute EMA creates a buy opportunity.

Relative Strength Index (RSI)

Measures trend momentum change. RSI above 70 suggests overbought (or sell opportunity). RSI below 30 suggests oversold (buy opportunity). Simple but effective in scalping.

Stochastic

Almost identical to RSI but measures how long the trend will last. Reference levels are 80 (sell overbought) and 20 (buy oversold). Many traders use RSI and Stochastic together for confirmation.

MACD (Moving Average Convergence Divergence)

Detects trend changes by measuring convergence and divergence between two moving averages. Each MACD line crossover generates a possible entry or exit.

How to Execute a Scalping Trade in Practice

Let’s take EURUSD with a spread of 0.6 pips. Your account has 100 USD.

Your plan:

• Risk per trade: 2 USD (2% of account)
• Target: 2 USD profit (ratio 1:1)
• Position size: 0.01 lots
• Stop loss: 3 pips below entry
• Take profit: 20 pips above entry

The trade:

• Buy 0.01 contracts of EURUSD at 1.05430
• Stop loss set at 1.05230
• Take profit at 1.05630
• Price rises to 1.05630 and closes automatically
• Result: 20 pips gained = 2 USD profit

Your account now totals 102 USD. Each trade closes with +2% if won, or -2% if lost. With discipline, 10 winning trades in a day could exponentially multiply your capital.

Real Advantages of Scalping

• Limited risk: Short positions limit exposure to large adverse movements.
• Multiple opportunities: 10+ trades daily allow gains even with a 60% success ratio.
• Diversification: You can apply scalping to multiple pairs simultaneously.
• Total autonomy: No reliance on recommendations or anyone else.
• Immediate gratification: See results in minutes, not months.

Disadvantages That Ruin Traders

• Exhausting concentration: 8 hours daily glued to screens analyzing charts. Mentally draining.
• Accumulating commissions: With dozens of trades, brokers take a significant percentage.
• Destructive psychology: 3-4 consecutive losses can devastate confidence and break discipline.
• Lack of opportunities some days: Low liquidity = few entries. Some days you won’t be able to trade.

Survival Guide for Beginners

Step 1: Theoretical Education
First learn what pip, lot size, leverage, spread, liquidity, volatility, buy/sell stop, buy/sell limit, take profit, stop loss mean. Don’t start without fully understanding these terms.

Step 2: Mandatory Demo Account
Create a demo account with virtual money. Experiment for 2-4 weeks without real risk. Make mistakes, learn what doesn’t work, refine your technique.

Step 3: Advanced Technical Analysis
Master Fibonacci, supports, resistances, trend lines besides the indicators mentioned.

Step 4: Choose Your Broker
Compare spreads, execution speed, minimum deposit, reputation. Read reviews. Some brokers automatically close positions before your account goes negative (valuable protection).

Step 5: Realistic Initial Capital
Many brokers require minimums of 100-500 USD. Deposit only money you can lose without affecting your life.

Step 6: Discipline Without Negotiation
This is where 90% of traders fail. Once you define your risk rule (e.g., 2% per trade), STRICTLY FOLLOW IT. Don’t improvise, don’t increase risk on “lucky days,” don’t abandon your strategy.

Final Reflection: Not for the Weak

Scalping is attractive because it promises quick money. The reality is not everyone makes money trading. Some lose everything. Some even lose more than they invested if they don’t use stop loss properly.

If you follow every recommendation in this guide, have unwavering patience, and iron discipline, scalping could become your financial weapon. But remember: the market doesn’t give away money. Every pip you gain will be conquered through analysis, experience, and suffering.

The scalping journey begins with humility. It ends with profit or ruin. Choose wisely.