Speed is something that appeals to traders even more than profitable investments. Most traders are attracted to making money fast by Scalping strategy in Etoro. It delivers quick results that satisfy the needs of short-term adventurous traders. This post will take you to the roller coaster of earning $970 with only 5 transactions. It’s my real example for you of how to use the Scalping trading strategy effectively in Etoro.
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Review Scalping trading orders in Etoro
Conditions: Set up 1M, 5M, 10M Japanese candlestick charts. Set up an RSI indicator in Etoro.
Open an order at the leverage of 500% with the stop-loss at 25% and the maximum take-profit at 50% (250$). Depending on the situation, you can flexibly exit the order to take profits early.
1st order: Opened a Buy order when the RSI indicator was in the oversold zone.
2nd order: Opened a Buy order when the price hit the support zone (which was the oversold zone of the 1st order) and rebounded.
3rd order: Opened a Buy order when the price was about to touch the oversold zone (where the candlestick tried but exhausted) of the RSI indicator.
4th order: Opened a Buy order when the price hit the support zone.
5th order: Opened a Sell order when the price broke out of the support zone and formed a downtrend.
Scalping trading strategy needs concentration
Scalping requires a lot of time and concentration if you want to make a profit. If you cannot spend a few hours a day observing and analyzing the chart, you may not belong to the group of investors that fit this trading style.
In the Scalping trading strategy, orders are always opened and closed during the day. It is conducted by opening an order and waiting for the profit to be a few pips then closing the trade and repeating the same operation over and over for hours.
It is really one of the most simple and effective trading strategies. The main factor that determines the success of the Scalping style is simply trading volume. Investors who apply this method usually open at least dozens of trading orders a day. And it is not uncommon for an investor to execute hundreds of orders a day.
Capital management when trading with Scalping strategy
Due to the quick and decisive nature of the transaction, you have very little time to consider. Therefore, you must be very smart in all situations when the time for preparing is too little. Avoid going against the trend to get caught up in a spiral of losses.
Don’t try to open a Buy or Sell order once everything is over. Make your own trading principles. Don’t turn yourself into a trading addict. Say no to unknown opportunities because there are many upcoming opportunities. Especially, with this Scalping method, you will have no less than 10 opportunities per day with an asset.
Keeping money is probably the best way to make money. Don’t focus too much on the profit. Keep your wallet very carefully when flying with the emotional roller coaster.
When trading Scalping, traders will take advantage of small price variations on hundreds of transactions. There should be a risk management level in place to prevent minimal losses. Therefore, you must always set your stop-loss as well as find the best entry point to avoid the risk.
Set the Risk/Reward ratio. This is also considered a part of capital management. Traders should consider this ratio carefully.
Suitable indicators for the Scalping trading strategy
To have reasonable entry points following the price movements, you need the following indicators:
Stochastic indicator
The Stochastic indicator is often used to identify market trend reversals. The mainly used zone is around the 20 and 70 levels that represent oversold and overbought zones. They are to know when to buy or sell a currency pair.
Ichimoku
The Ichimoku indicator depicts price movements on the chart in the most intuitive way, giving traders a more comprehensive view. It helps to identify the upcoming trend and choose the right time to enter and exit the market based on price action. This is an independent indicator without the help of other analytical techniques.
RSI indicator
The RSI indicator is used to measure approximate price changes in overbought or oversold conditions. In which, if the RSI is above 70, the currency pair is overbought. And when the price is below 30, it signals that the currency pair is oversold.
Trading psychology
Trading with shorter time frames is inversely proportional to the psychological challenge and patience.
In short-term trading, psychological pressure will be greater. It also requires more patience to achieve maximum profits while the risks are minimized.
In fact, short term traders suffer from greater psychological pressure than long term traders.
Trading discipline also needs to be ensured. Placing orders quickly, accurately, and exiting at the right time without greed are the key factors.
The majority of short-term traders fail because they do not learn Scalping properly. And most importantly, regarding the foundation of capital management, their basic knowledge is almost empty. They don’t know how to use leverage. And they do not know when to apply price action signals effectively.
Always remember that success with a short term trading strategy takes time, effort, and patience. When you practice the above factors, you will survive in a fierce market.
To conclude
If you want to make money in Etoro using the Scalping trading strategy, first of all, you need to understand how it operates. From there, focus on strengths and limit existing psychological flaws. Seriously practice with a virtual account before trading with real money.
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The post How To Use The Scalping Trading Strategy Effectively In Etoro appeared first on How To Trade Blog.
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