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jueves, 26 de diciembre de 2013

Stock trading scalping

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scalping as a trading system for stocks

Also known as "Quick trading", the scalping is a trading technique designed to trade on a very small span of time, from seconds to a few minutes, during which a buy/sale trade of an asset (such as shares in the stock exchange) must be closed in order to get fast earnings. Depending on the analysis performed to the asset price and the market movement, it is possible to use this technique to take advantage of price micromovements in almost any market, mainly those with high liquidity.

Obviously, the scalping is very risky if you do not have the knowledge and tools necessary to carry out this trading strategy in the best way. Technological support and market knowledge are essential in this activity since the constant financial move can be computed and algorithmically decoded so traders can get an excellent income if they can take advantage of technology and experience as investors. For this reason, the scalpingt is advisable for traders with enough practice and access to a very good trading platform.

A good "scalper" should keep in mind that it is essential to monitor any movement of stocks in a given period of time, since any event affect the market value of a share sometimes over a very short period of time, which can cause that the price goes up or down. This is why the "scalper" should have as a priority to obtain real-time market information, so it is recommended to open an account with a broker that charges low fees and offer the best trading platform with the best performance possible (the platform should include an analysis package with modern price charts) and access to updated market news and analysis.

The assets through which a scalper can get more gains are are thosw with the maximum liquidity. The higher the turnover, the greater the benefits, so the trader who applies this trading technique should pay attention to volatility and dynamism of the market to get the best benefits. The larger the movements at the right times the greater the benefits obtained. While fees reduce the returns to a few dollars per transaction, it is also true that in the most active hours; opening, closing and mid-session, you can perform the necessary trades to obtain a considerable gain in about 20 or 30 movements per hour.

As you may have noticed, this way of trading requires knowledge and experience in addition to the technological support to carry it out. Also, a good technical analysis, combined with a good fundamental analysis, can be very beneficial for the "scalper" in order to get the expected earnings.

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