Scalping vs Swing Trading - 2021

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  • Created by: CoddyG
  • Created on: 28-08-21 23:42

Scalping vs Swing Trading - 2021

Many people participate in the stock markets, some as investors; others are like traders. Investing is carried out taking into account the long-term perspective - years or even decades. Meanwhile, trading is done for pocket profits on a regular basis.

There are many subcategories of traders. One common way to tell them apart is through the "time period" over which traders hold stocks, which can range from a few seconds to several months, even years. Some of the popular trading strategies are day trading, swing trading, scalping and position trading. Choosing a style that suits your own trading nature is essential to long-term success. This article outlines the differences between scalping strategy and swing trading strategy.

Scalping

A scalping strategy is aimed at small changes in the intraday movement of the stock price to accumulate profits by frequent entries and exits throughout the trading session. This is sometimes seen as a subtype of the day trading method; scalping involves several trades, but with a very short retention period, from a few seconds to several minutes. Because positions are held for a very short period of time, the gains from a particular trade (or profit per trade) are small, and thus speculators indulge in numerous trades (even hundreds throughout the day) to increase profits. Limited temporary market exposure reduces the scalper's risk.

Scalpers are fast and do not stick to any pattern, they can be short in one trade and then go long in the next; small opportunities are targeted for them. Scalpers usually tend to work around bid-ask i spread. That is, buying in the auction and selling on assignment (or rather, around the order and ask), thereby increasing profits. Such opportunities usually exist for more than big moves, since it is fair to say that the markets are still witnessing…

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