Option strategies being strangles, straddles, diagonals and anything that walks on two legs or more.Īs The Trading strategy – There is also a category of traders whose sole idea of trading is Scalping. To Reduce Cost Basis of existing positions – Scalping can help to reduce the overall cost of the positions, irrespective of the Option Strategies you may use. Say if you observe charts on a 1 minute time frame, you may be able to spot scalping opportunities in price patterns which a longer time frame chart or EOD Open/High/Low/Close data may not reveal.
It builds your awareness around small movements in the markets while keeping you alert and sharp.īeing engaged has some more advantages. What’s the edge I see and why it’s worth the time that I spend? I see three primary reasons, there could be others though.Īs an Engagement Tool – As a full-time trader you may be using positional/swing trading strategies, this would mean you take trades for longer time horizons, while you are in those trades, instead of just gazing at the charts for hours, being active with scalping helps you be engaged in the market and be agile to execute a trade when needed. I am sure, you must be thinking, as to why should I use scalping as an approach to trading. Though not explicitly stated, Scalping is always an intraday play.
It is a trading style specializing in taking profits on small price changes, generally soon after a trade has been entered and has become profitable, for a predetermined profit target. Scalping refers to buying and selling a tradable instrument multiple times in the same day for a small profit each time, which could add up to be a large sum.
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