Economy
Why Scalping is the go-to Trading Strategy for Cryptos
If you’re familiar with forex dealing, you’ve also come across the word scalping. It is also known as scalp dealing. It’s a trading technique in which customers benefit from minor fluctuations in futures markets.
Functional analysis, such as the MACD, and candlestick tables, are primarily used in its implementation. This is now standard procedure for cryptocurrency traders.
The aim of this approach is to make money fast, but the issue that keeps coming up is how it works for cryptocurrencies like Bitcoin. We’ll go into the specifics of how crypto scalping operates and how you can use it to your benefit as a crypto trader.
How does scalping work?
Scalping has traditionally been shown to be a low-cost, short-term trading tactic that yields lower gains with less risk. Traders who use this technique do so by making a series of small trades easily. And as the trading day progresses, these small trades will add up to a significant amount of benefit, as in this minute scalping technique, where a trader must bring in all of his paces and focus for these small trades to come in, and this is why most veteran traders use electronic trading systems, which are built to assist traders in identifying and executing trades based on data obtained from various sources.
Traders that use this technique for cryptocurrencies can keep an eye on the values of a crypto pair, such as ETH/BTC or BTC/USD, and take advantage of market fluctuations to benefit from each small transaction. When rates rise, investors benefit from higher market volume because it adds value.
This helps you to open and close trades easily without having to keep them for an extended period of time. And as soon as the market reaches your target price, sell signs will appear, closing your positions for you while you walk away with a slight profit.
However, for the beginner on the market, it is more beneficial to use the 1-minute scalping strategy, which can be a little bit different from what the experienced traders are using. The method would still necessitate time and focus effort. If you are unable to devote at least a few hours per day to this FX approach, you should try using other, less time-consuming trading tactics.
The exchange and trading costs are two very critical factors to remember when implementing this approach. Since most trades charge a taker and a nominal creator fee on each deal, and you’ll be doing multiple minor trades in a row, you’ll need profit margins and risk resources to cover the fees you’ll incur for this approach.
Bonuses are often offered by trades that foster liquidity in order to reduce trading costs. These bonuses are often linked to an exchange-specific token that can be used to further mitigate costs, often up to a 50% discount.
Altcoin scalping vs Bitcoin scalping
Bitcoin is also the most stable of the dynamic community of cryptocurrencies when compared to other cryptocurrencies. This ensures the gains per exchange are smaller, but it’s still useful for scalping because theoretical research forecasts that BTC will stay steady during the trading session. As a result, the most popular method of scalp trading in the cryptocurrency industry is BTC scalping.
Altcoin, on the other hand, may have significant price variations. This is especially true if the coins are smaller and are not sponsored by a well-known business. A coin could be deleted from the list, so anything could go wrong, including the money you made from the trades. If the coin isn’t worth much, the cost of transaction fees can be greater than the profit you gain from trading.
Whatever crypto you want to test your scalping technique with, persistence and concentration are essential. It’s always a good idea to turn off your feelings at this stage to prevent being upset or giving up on your trade too soon if you don’t see profits within a few minutes.
What time is good for scalp trading with cryptos?
You’ll be able to tell whether the new business dynamics favour scalping or not until you know what to look out for. It’ll take some time and experience, but if you know what to look out for, you’ll be able to tell. When using the scalping technique, crypto investors are always on the lookout for three key business variables.
Relative Strength Index (RSI)
This is a tool that is measured based on recent market shifts. The relative Strength Index (RSI) determines if a commodity, such as Altcoin, is oversold or overbought and displays the results as a line graph. It could represent a number between 0 and 100. A Relative Strength Index of 70 or higher sometimes indicates that an asset is oversold or overbought, signalling a reasonable time to sell. When it is 30 or lower, the same is true: the stock is undervalued and primed for a price rise, signalling a reasonable time for a seller to buy.
Support and Resistance Levels
If an asset’s price rises or falls, its support and resistance ratios can change. As a result of this transition, an asset may experience a downward trend and a concentration of demand, or it may experience a rise in demand as prices decline.
The Moving Average
Investors use this to predict where an instrument’s price will go in the future by using historical data to predict what will sell. Some traders use charts to manually watch these metrics, but automation tools will help you interpret the same data quicker.
Scalping allows a dealer to make a lot of small gains from a large number of small transactions that accumulate easily, proving that “a little goes a long way.” Traders should be aware of the fees associated with such transactions, as the value provided can be less than the fee paid. However, much like anything else, a trader must put in time and effort to become an expert, particularly in a market as competitive as crypto trading.
By Adedapo Adesanya
The NASD Over-the-Counter (OTC) Securities Exchange extended its stay in the south territory with a decline of 0.56 per cent on Wednesday, April 2.
This brought down the market capitalisation by N13 billion to N2.417 trillion from N2.430 trillion, and downed the NASD Unlisted Security Index (NSI) by 22.57 points to 4,062.87 points from the previous session’s 4,062.87 points.
It was observed that the NASD exchange ended with three price gainers and three price losers during the trading day.
MRS Oil Plc depreciated by N19.00 to close at N171.00 per unit compared with the previous price of N190.00 per unit, NASD Plc lost N4.14 to trade at N37.36 per share compared with Wednesday’s N41.50 per share, and Central Securities Clearing System (CSCS) Plc gave up N2.00 to sell at N78.00 per unit versus N80.00 per unit.
On the flip side, FrieslandCampina Wamco Nigeria Plc appreciated by 19 Kobo to N93.00 per share from N92.81 per share, Food Concepts Plc expanded by 15 Kobo to N2.87 per unit from N2.72 per unit, and Great Nigeria Insurance (GNI) Plc improved by 2 Kobo to 52 Kobo per share from 50 Kobo per share.
Yesterday, the volume of securities dipped by 91.8 per cent to 260.2 million units from 3.2 billion units, the value of securities went down by 98.1 per cent to N154.2 million from N8.3 billion, while the number of deals soared by 53.3 per cent to 46 deals from 30 deals.
GNI Plc was the most active stock by value on a year-to-date basis with 3.4 billion units worth N8.4 billion, followed by CSCS Plc with 56.9 million units valued at N3.9 billion, and Okitipupa Plc with 27.5 million units traded for N1.8 billion.
The most traded stock by volume on a year-to-date basis was also GNI Plc with 3.4 billion units sold for N8.2 billion, trailed by Resourcery Plc with 1.1 billion units exchanged for N415.7 million, and Infrastructure Guarantee Credit Plc with 400 million units transacted for N1.2 billion.
By Adedapo Adesanya
The Naira dropped N2.09 or 0.15 per cent against the United States Dollar in the Nigerian Autonomous Foreign Exchange Market (NAFEX) on Thursday, April 2, to trade at N1,380.79/$1 compared with Wednesday’s rate of N1,378.70/$1.
However, it appreciated against the Pound Sterling in the official market by N2.77 to quote at N1,824.86/£1 versus the N1,836.57/£1 it was traded at midweek, and improved its value against the Euro by N10.54 to N1,591.92/€1 from N1,602.46/€1.
Yesterday was the last trading session of the week for the local currency in the spot market, as the market will be closed on Friday and Monday for the Easter Holiday.
At the black market, the Nigerian Naira maintained stability against the greenback yesterday at N1,405/$1, but gained N8 at the GTBank FX counter to settle at N1,388/$1, in contrast to the previous session’s N1,396/$1.
Pressure eased on the domestic currency as strong policy indicators have helped calm the majority of worries within the financial systems. Particularly in the remittance segment, the apex bank has directed all International Money Transfer Operators (IMTOs) to route remittance transactions through designated Naira settlement accounts in banks, a move aimed at boosting transparency and channelling more foreign exchange into the formal market.
This helps take off pressure from the foreign reserves, which have fallen below the $50 billion mark as they are gradually decreasing rather than falling sharply.
Meanwhile, the cryptocurrency market was bullish on Thursday, as macro sentiment shifted against recent optimism after reports that Iran is drafting a protocol with Oman to manage traffic through the Strait of Hormuz, easing concerns about disruptions to a key global oil route.
The remarks came after U.S. President Trump on Wednesday night vowed to hit Iran “extremely hard” in the coming weeks and that the Strait of Hormuz would “open naturally” once the war ends.
Cardano (ADA) chalked up 1.9 per cent to trade at $0.2435, Dogecoin (DOGE) grew by 1.2 per cent to $0.0912, Ethereum (ETH) appreciated by 0.8 per cent to $2,066.37, Bitcoin (BTC) added 0.5 per cent to sell at $67,080.53, Solana (SOL) increased by 0.5 per cent to $79.91, and Ripple (XRP) jumped 0.2 per cent to $1.31.
Conversely, Binance Coin (BNB) dipped 0.7 per cent to $586.90, and TRON (TRX) depreciated by 0.3 per cent to $0.3147, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) closed flat at $1.00 each.
By Dipo Olowookere
The local stock market was relatively flat on Friday, as the bears and the bulls shared the spoils of war, though investor sentiment turned bullish compared with the preceding session’s bearish posture.
Data from the Nigerian Exchange (NGX) Limited showed that the All-Share Index (ASI) was marginally down by 4.66 points as it ended at 201,698.89 points versus Wednesday’s 201,703.55 points, and the market capitalisation slightly contracted by N3 billion to N129.806 trillion from N129.809 trillion.
Customs Street was shut on Friday because of the public holidays declared by the federal government today and next Monday.
Business Post reports that John Holt declined by 9.91 per cent to N15.45, Abbey Mortgage Bank shed 9.60 per cent to trade at N8.95, International Energy Insurance slipped by 6.48 per cent to N3.32, Chams shrank by 5.30 per cent to N3.75, and Tantalizers depreciated by 5.18 per cent to N4.03.
On the flip side, Unilever Nigeria improved by 10.00 per cent to N103.40, Fortis Global Insurance gained 9.82 per cent to trade at N1.23, Multiverse appreciated 9.81 per cent to N20.15, Legend Internet advanced by 9.38 per cent to N6.30, and Zichis grew by 9.02 per cent to N14.14.
The market breadth index was positive during the trading session, as there were 35 appreciating stocks and 24 depreciating stocks.
Yesterday, investors traded 560.0 million equities valued at N19.3 billion in 49,676 deals, in contrast to the 815.5 million equities worth N33.3 billion transacted in 52,641 deals in the preceding day, representing a drop in the trading volume, value, and number of deals by 31.33 per cent, 42.04 per cent, and 5.63 per cent, respectively.
Secure Electronic Technology dominated the activity log with 59.7 million shares valued at N61.1 million, Wema Bank exchanged 52.0 million equities worth N1.4 billion, VFD Group transacted 36.0 million stocks for N410.5 million, Access Holdings sold 35.3 million shares valued at N914.8 million, and Chams traded 31.0 million equities worth N115.0 million.
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