Basics of Scalping

What is Scalping

Scalping is a trading style based on profiting from short-term price fluctuations. Unlike position trading (holding for months) or swing trading (holding for days or weeks), a scalper executes many rapid trades, “skimming the cream” off small price movements.

In practice, scalping includes two primary approaches:

• Working with frequent fluctuations — identifying recurring market situations that occur regularly and are accompanied by relatively small price changes

• Working with sudden spikes — taking advantage of rare but sharp price movements caused by liquidity surges, order book imbalances, or major fundamental news.

The choice of approach depends on the trader’s style, market volatility, and the analytical tools used.

Scalping Principles

Scalping is based on the idea that small price moves happen more frequently than large ones. Instead of waiting for major trends, scalpers exploit short-term volatility. A typical profit target is 0.1–0.5% per trade, but the high trading frequency compensates for the small moves.

Modern technology enables significant automation of scalping: from detecting favorable market conditions to executing trades. Trading terminals like MoonBot allow users to configure automated strategies that reduce trader workload and execute operations without constant screen time.

Advantages of Scalping

• Fast results — profits are realized within seconds or minutes

• Ability to capitalize on strong news-driven volatility spikes

• Effective in all market conditions — both trending and ranging

• Low risk per trade due to short holding times

• Potential for automation of trading processes.

Disadvantages of Scalping

• High impact of trading fees — each trade eats into profits

• Increased psychological pressure during manual trading

• Requires fast internet and reliable hardware

• High demands on order execution quality.

Scalping Types by Level of Data Detail

Once you understand the basic principles, it's important to determine which type of market data you'll be working with. Modern scalping can be divided into two types:

1. Scalping on Minute Candles (1–5 minutes)

A more accessible option for traders with intraday experience. Uses standard candlestick charts with minimal timeframes.

Features: Data is averaged into candles, which hides some of the market's micro-movements but makes analysis more structured and readable. Suitable for learning the basic principles of scalping.

Technical requirements: stable internet connection, trading platform with fast order execution, and the ability to work on 1–5 minute timeframes.

2. Scalping on Tick Charts

A professional-level approach requiring maximum data detail. Each transaction is displayed separately, without being averaged into candles.

Features: every trade is visible in real-time, allowing you to catch micro-movements and react to large players. The vast data flow requires exceptional focus and professional-level skills.

Technical requirements: Specialized trading terminals with tick data, high-speed internet, powerful hardware, minimal latency to the exchange servers.

Principle of data aggregation: from tick chart (every trade) → 1-minute candles → 5-minute → 15-minute → hourly, and beyond. The finer the granularity, the more precise the market work can be, but the higher the requirements for equipment, reaction speed, and trader professionalism.

Understanding the principles of scalping is only the first step. Successful practice requires comprehensive preparation: proper technical setup, strong psychological resilience, and mastery of trading strategies. The most effective path is a combination of learning from experienced scalpers and using automated trading systems. Education provides understanding of market mechanisms and tested approaches, while automation reduces psychological stress and allows focus on strategy. More details on technical and psychological aspects are covered in the next sections.