Cryptocurrency is a kind of digital currency. It is also the most volatile asset. People can earn cryptocurrency through mining. But it becomes more difficult for miners to do this. In such cases, companies, such as EMCD.io, which provide mining pool services, are helping.
People also make money on cryptocurrency using some strategies. One of these is scalping.
What Is Scalping?
Scalping is a popular trading strategy. It implies making money on asset price fluctuations that occur during a short period, for example, a day. Traders who choose such a strategy for working on the cryptocurrency market are called scalpers. Scalp traders will track the asset price and use this fluctuation to their advantage. They can make many trades in short periods.
You can explore the list of digital currencies and increase your income here.
Advantages and Disadvantages of Scalping
Like any process, scalping has pros and cons. This fact should be considered when choosing this trading strategy.
- You can quickly make money
- A small amount of money is enough to get started
- You can work anonymously
- There are risks of losing money if calculations turn out to be incorrect
- You need to constantly monitor market changes
- It is impossible to predict the final level of earnings
List of Major Scalping Strategies
Let’s consider the most popular scalping strategies.
The first strategy is news trading. To get started, you need to find information sources, from which, you will quickly receive information. You need to regularly follow the latest updates and watch the publications of well-known personalities in the crypto community. In this case, you do not need to be a professional analyst to find the right moment for a bargain purchase. It is just important to understand the impact of an event on the dynamics of the asset rate. For example, Elon Musk’s company said it invested $1.5 billion in bitcoin. Accordingly, traders who follow the news know that cryptocurrency purchases will begin. This will lead to an increase in its price.
Trade by technical analysis. This method helps to predict the asset rate movement during the day. To work, traders will need to learn all the subtleties of technical analysis.
A study of the behavior of other market participants. It is possible to view the orders of buyers and sellers for the purchase of cryptocurrency on many digital asset exchanges. This data helps to determine in which direction the asset’s rate will go in the short term. The meaning of the strategy is as follows:
The more buyers are on the market, the higher the probability of further asset growth.
The coin, most likely, will become cheaper if there are more sellers than buyers on the market.
Is Scalping Profitable or Not?
Scalping income depends on the number of trades and their effectiveness. In a small period, you can earn a significant percentage of the initial capital. Experienced scalpers are advised to use several strategies at once to make money on scalping. But if you use at least one of the strategies incorrectly, you can lose money. Therefore, place your trades only when you are sure of them.