Some investors prefer to stay away from the current volatility and tumbling prices of the crypto market. However, experienced traders see a downturn in any market as a great opportunity.
While lots of people lose money during the panic of a crypto crash or sell off, professionals have the range of tools needed to make substantial profits during this time. There are several ways to turn a profit during the crypto market turbulence.
Advantages and disadvantages of Scalping
Scalping is one of the useful strategies. It enables us to take advantage of small market movements with quickly entering and exiting positions during an hour or a day. The trick is to make as many successful small trades as possible while simultaneously avoiding losses. You should aim to maintain a higher win/loss ratio instead of high returns per trade.
The size of winning and losing trades is usually almost the same, and they amount to a very small percentage of the whole portfolio. It means that you have to win more often to make a profit. Some strategies make money by winning only a couple of big trades while allowing traders to lose the majority of trades. However, Scalping is the opposite.
Scalper traders try to avoid high volatility as it’s unpredictable for them. The best situation for them is a thin, calm market with little or no volume. Besides, a thin market usually has huge spreads between bids and asks. That allows scalpers to profit easily on those gaps while buying on one side and selling on the other.
Scalping has lots of advantages. It is considered relatively safe and employs very small time frames. As a result, you can exit the trade anytime, if something goes wrong. Scalper trader always controls how much they win and lose.
However, there are some downsides, as well. Scalping requires some experience in reading indicators, as well as patience and discipline. The scalper trader has to watch charts closely and compete with trading bots that also try to use scalp opportunities.