I have been scalping successfully for well over a year now, I’ve found a few things to be incredibly helpful:
1. Cut your losses early
If you’re going to scalp effectively, you’re gonna need very clear rules for exiting your trades and execute as flawlessly as possible. If my trade doesn’t run into profit within the first few minutes of entry, I know that my edge in the market is diminished since the best trades tend to work right away. Because of this, I close out losses very quickly.
2. Let your winners run
Seems obvious right, in reality it’s much harder to get consistent at. Scalping has much higher potential reward than other kinds of trading because you’re often using high leverage to get solid returns off of just a few pips. If you can find a consistent method for letting your winners run, the results can be incredible. I use a confluence of support/resistance, price action and moving averages as a signal to exit a winning trade. Find an exit strategy that works, backtest the hell out of it and go from there.
3. Be emotionally consistent
You have to be very accountable of yourself when scalping, you can take 5 losses in a row in a matter of 30 minutes and get caught in your head. Because of this, I’d say it’s the hardest way to trade. Get in tune with yourself before scalping, I made the mistake of jumping into the markets and not thinking about my psychology far too many times and have paid the price.
4. Keep spreadsheets of ALL of your trades
Record the entry time, exit time, percentage return, position size, how you felt about the trade, and insert screenshots. You can take screenshots on your computer and upload them to a free site called Screencast, this website will then give you a URL link of your screenshot that you can paste into your spreadsheet. Spreadsheets allow you to review your trades in an objective fashion to transform your trading. This has been an absolute game-changer for me.
5. Stick to only a few currency pairs or even just one
I personally only trade EURUSD with my system, that isn’t to say that my system won’t work on other currency pairs, it is first and foremost about not getting over-stimulated by having to trade several currency pairs.
Hope this helps! I know first-hand how difficult it can be to scalp the markets, but there are ways to do it effectively that all too often don’t get talked about.