Types of scalping

In practice, there are several types of scalping, which sometimes misleads some traders who decide to choose this trading strategy.

The division is based on the ratio of trading volume to the size of the trader's deposit and the duration of the trades. The amount of profit also varies.

Pipsing is the riskiest and yet most profitable form of scalping. Pipsing trades are conducted on the M1 (minute) timeframe. Position holding rarely exceeds a few minutes.

The profit size at which the position is closed is only a few points (pips), but due to the use of simply enormous leverage (1:500, 1:1000), even 1 point has quite a lot of weight.

For example, if a 0.5 lot trade is opened with a $100 deposit, the approximate price per point is $5, and just 2 points of profit will already amount to 10% of the deposit amount.

Of course, there is also a reverse effect: you can experience a drawdown or lose your deposit just as quickly when using scalping as you can make money.

Medium-term scalping is a less dynamic form of trading. Trading is conducted on the M5 market, and the transaction can last 5-10 minutes, increasing the number of points earned accordingly.

But since the amount of noise is already increasing in this time period, the ratio of deposit sizes to transaction volumes is no longer so great and is on average 1:200, that is, with the same deposit of $100, the profit from 1 point will be $2.

Conservative scalping – when used, a fifteen-minute time frame is selected, and the trade duration can extend to half an hour. Profits sometimes reach 20-30 pips.

The advantages of this type of scalping are obvious: lower risk due to the use of leverage of 1:100 – 1:200, the absence of sanctions from most brokers, and less psychological stress when trading.

But at the same time, the profit is not as impressive as when scalping.

Scalping you to experience all the benefits of leverage, and the type you choose depends on your personality and risk tolerance.