Let’s Draw a Subtle Line Between Scalping & Day Trading

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How long have you been trading? And which type of trader would you call yourself? Are you a scalper in Kenya? Does day trading describe you better?

Are you a swing trader in the Pacific?

Would you comfortably refer to yourself as a week trader in the US! Or you are just a simple position trader somewhere in Asia!

Who are you?

But really, is there any difference?

Yes, there are lots of differences.

But, in this post, we will only focus on day trading. Putting more emphasis on scalping which is the most common trading style with millennial & beginning traders.

Note that all Forex trading styles work perfectly by an individual. And if there really is any difference then it is mainly in the timings.

So,

What’s Scalping?

And How Can I Use it To Take Advantage of Small Market Moves?

Scalping is a trading style where impatient traders take advantage of momentary opportunities – grabbing small wins consistently in a relatively safe fashion.

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Scalpers go in & out of positions during the day – using the most volatile assets.

A scalper can make $0.9 or less for every option he calls but when you sum up his winnings from different FTTs – for the whole day then you might just be so surprised how much he makes.

What is Day Trading?

And Is it Better Than Scalping?

This is when a trader picks sides in the morning – opening one or more positions that are only closed at the end of the day. Often 30 minutes to several hours.

Itg fits well with those who have full-time jobs with no time to react to the chats instantaneously.

What’s The Difference Between Scalping & Day Trading?

Scalping.
Day Trading .
  • Small time frames of up to 5 minutes are used.
  • Positions are opened during one trading day.
  • Short duration positions. 
  • Positions are short-term & they only bring part of the profits.
  • Positions bring smaller profits.
  • Does not require larger investments.
  • Scalpers take advantage of insignificant price moves.
  • Time frames of the charts range from 30 minutes to several hours.
  • Positions are not held overnight.
  • Positions are closed within the same trading day.

Three Reasons Why You Should Scalp. 

Needs little investment.

You can stop a trading session at any time to reduce your losses.

There’s reduced risk per deal.

Disadvantages of Scalping 

Psychological stress – especially when trends are going against your forecasts.

Needs a lot of concentration & staying in front of the computer.

Calling rapid FTTs drains your resources faster.


*Risk warning:

The information provided does not constitute a recommendation to carry out transactions. When using this information, you are solely responsible for your decisions and assume all risks associated with the financial result of such transactions.
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Kenn Omollo is an investment writer and a business management consultant at Joon Online Limited. Reach him at - kenn@joon.co.ke

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