What Is Scalping?
Scalping is an ultra-short-term trading strategy that aims to profit from tiny price movements, holding positions for seconds to minutes. Scalpers execute dozens to hundreds of trades per day, each capturing small gains (often 0.1-0.5%) that accumulate through volume. It requires exceptional execution speed, tight spreads, and low fees.
How Scalping Works
Successful scalping depends on three factors: execution quality (entering and exiting at precise prices), edge consistency (a small but reliable statistical advantage per trade), and cost management (trading fees must be significantly less than average profit per trade). Scalpers typically use 1-minute and 5-minute charts, order flow data, and level 2 order book depth.
Why It Matters for Traders
Scalping in crypto is extremely demanding and not suitable for most traders. The edge per trade is tiny, so a single large loss can wipe out hours of profit. Transaction fees, slippage, and the psychological toll of intense focus make scalping viable only for those with deep order flow experience, low-cost trading infrastructure, and the discipline to maintain flat-to-small positions.
