If you have read our guide up to this point, you know that scalping trading has a completely different mindset than that of swing trading. In fact, scalping is much more controlled and systematic, not least because only one of two outcomes will ever show up. On the contrary, swing trading often takes a "let's see how the markets react" approach. Here are some of the most notable advantages of scalping trading.
Less Risk
One of the overarching benefits of a scalping trading strategy is that you always have a risk mitigation plan in place. This comes in the form of a stop loss order, which means that you will never lose more than the exit trigger price.
Note: Stop loss orders are never 100% foolproof - especially trading in volatile conditions at forex broker exness. You do have the option to set up a guaranteed stop loss. However, the additional fee associated with it may make scalping trading unprofitable.
Scope of trades.
If you have a strong passion for the financial markets, scalping trading is ideal. This is because you will probably have to place dozens - if not hundreds of trades per day.
Remember, you only want to make a few pips of profits per trade. So you need to repeat the process throughout the day to make scalping profitable. Therefore, scalping trading is best suited for those of you who want to trade on a full-time basis.
Profit when markets consolidate.
When a certain asset consolidates, it means that it trades in a certain range for several hours or days before the markets decide which direction the asset will go next.
For example, in a consolidation period for GBP / USD, the currency pair might trade in a narrow range of 1.3001 to 1.3050. This provides very favorable conditions for scalp trading.
Huge number of trading opportunities.
Scalping trading can be used for virtually any asset class. This is especially the case when trading large forex pairs, as the markets are open 24/7. Moreover, large pairs benefit from a lot of liquidity, and volatility is usually low, which makes them perfect for scalping.
Avoid the threat of greed
Greed is often the difference between a trader who makes consistent profits and a trader who does so burning their bankroll through irrational positions. Nevertheless, scalping is all about making ultra-small - albeit frequent profits throughout the day. This ensures that the trader does not make irrational trades, as the necessary stop loss and profit taking orders are always in place for an effective scalping strategy.
