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 Modupe Gbadeyanka
The federal government has been asked by the Nigerian Bar Association (NBA) to suspend the implementation of the controversial tax laws.
In a reaction to the tax reform acts, the president of the group, Mr Afam Osigwe (SAN), the suspension of the laws would allow for a proper investigation into allegations of alterations in the gazetted and harmonised copies.
A member of the House of Representatives, Mr Abdussamad Dasuki, alleged that some parts of the laws passed by the parliament were different from the gazetted copy.
To address the issues raised, the NBA said it is “imperative that a comprehensive, open, and transparent investigation be conducted to clarify the circumstances surrounding the enactment of the laws and to restore public confidence in the legislative process.”
“Until these issues are fully examined and resolved, all plans for the implementation of the Tax Reform Acts should be immediately suspended,” the association declared.
It noted that the controversies “raise grave concerns about the integrity, transparency, and credibility of Nigeria’s legislative process.”
“These developments strike at the very heart of constitutional governance and call into question the procedural sanctity that must attend lawmaking in a democratic society,” it noted.
“Legal and policy uncertainty of this magnitude has far-reaching consequences. It unsettles the business environment, erodes investor confidence, and creates unpredictability for individuals, businesses, and institutions required to comply with the law. Such uncertainty is inimical to economic stability and should have no place in a system governed by the rule of law.
“Nigeria’s constitutional democracy demands that laws, especially those with profound economic and social implications, emerge from processes that are transparent, accountable, and beyond reproach. Anything short of this undermines public trust and weakens the foundation upon which lawful governance rests.
“We therefore call on all relevant authorities to act swiftly and responsibly in addressing this controversy, in the overriding interest of constitutional order, economic stability, and the preservation of the rule of law,” the organisation stated.
By Adedapo Adesanya
Demand for hot stocks, including MRS Oil Plc, buoyed the NASD Over-the-Counter (OTC) Securities Exchange by 0.52 per cent on Tuesday, December 23.
The energy company was one of the three price gainers for the session as it chalked up N19.69 to sell at N216.59 per share versus the previous day’s value of N196.90 per share.
Further, FrieslandCampina Wamco Nigeria Plc gained N2.95 to close at N56.75 per unit versus N53.80 per unit and Golden Capital Plc appreciated by 84 Kobo to N9.29 per share from Monday’s N8.45 per share.
Consequently, the market capitalisation went up by N10.95 billion to N2.125 trillion from N2.125 trillion and the NASD Unlisted Security Index (NSI) rose by 18.31 points to 3,570.37 points from 3,552.06 points.
Yesterday, the NASD bourse recorded a price loser, the Central Securities Clearing System Plc (CSCS), which gave up 17 Kobo to close at N33.70 per unit against the previous trading value of N33.87 per unit.
The volume of securities traded at the session went down by 97.6 per cent to 297,902 units from the previous day’s 12.6 million units, the value of securities decreased by 98.5 per cent to N10.5 million from N713.6 million, and the number of deals remained flat at 32 deals.
By value, Infrastructure Credit Guarantee Company (InfraCredit) Plc ended as the most actively traded stock on a year-to-date basis with 5.8 billion units exchanged for N16.4 billion. This was followed by Okitipupa Plc, which traded 178.9 million units valued at N9.5 billion, and MRS Oil Plc with 36.1 million units worth N4.9 billion.
In terms of volume, also on a year-to-date basis, InfraCredit Plc led the chart with a turnover of 5.8 billion units traded for N16.4 billion. Industrial and General Insurance (IGI) Plc ranked second with 1.2 billion units sold for N420.7 million, while Impresit Bakolori Plc followed with the sale of 536.9 million units valued at N524.9 million.
By Dipo Olowookere
It was another bullish trading session for the Nigerian Exchange (NGX) Limited as it closed higher by 0.59 per cent on Tuesday.
The market further rallied due to continued interest in large and mid-cap stocks on the exchange by investors rebalancing their portfolios for the year-end.
Yesterday, Aluminium Extrusion sustained its upward trajectory after it further appreciated by 9.96 per cent to N14.90, as Austin Laz gained 9.81 per cent to close at N2.91, Custodian Investment improved by 9.69 per cent to N38.50, and First Holdco soared by 9.35 per cent to N50.30.
Conversely, Royal Exchange declined by 7.22 per cent to N1.80, Champion Breweries shrank by 6.57 per cent to N15.65, NASCON lost 5.36 per cent to trade at N105.05, Sovereign Trust Insurance depreciated by 5.28 per cent to N3.77, and Japaul went down by 4.51 per cent to N2.33.
At the close of business, 29 shares ended on the gainers’ table and 27 shares finished on the losers’ log, representing a positive market breadth index and bullish investor sentiment.
This raised the All-Share Index (ASI) by 895.06 points to 153,354.13 points from 152,459.07 points and lifted the market capitalisation by N579 billion to N97.772 trillion from the previous day’s N97.193 trillion.
VFD Group finished the day as the busiest stock after it recorded a turnover of 192.0 million units worth N2.1 billion, GTCO exchanged 63.5 million units valued at N5.6 billion, Access Holdings traded 49.8 million units for N1.0 billion, First Holdco sold 45.8 million units valued at N2.3 billion, and Secure Electronic Technology transacted 38.3 million units worth N28.4 million.
In all, market participants bought and sold 677.4 million units valued at N20.8 billion in 27,589 deals compared with the 451.5 million units worth N13.0 billion traded in 33,327 deals on Monday, showing an improvement in the trading volume and value by 50.03 per cent and 60.00 per cent apiece, and a shortfall in the number of deals by 17.22 per cent.
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