To execute the strategy effectively, a trader must be able to spot trends in the market, anticipate upticks and downswings, and be able to understand the psychology behind a bull and bear market.
Effective scalpers must also be able to read and interpret short-term charts. They must often make decisions based on stock charting that is within 1- to 5-minute intervals. Scalpers look for key indicators such as moving averages and pivot points in the market to quickly determine if they can execute a trade. Scalpers invariably always come across losing trades, but a successful scalping strategy and discipline can help maximize the wins and minimize the losses.
Scalpers must also have liquidity and adequate capital in their portfolio to trade. They must subscribe to generally Level II platforms that show live bids and asks for specific stocks, as well as have an exceptional – generally wired – internet connection. It helps to prevent technical factors from decimating your trading strategy.
If the data you were receiving as a trader had too much latency, it could mean you are acting on outdated technical data and have already missed your window for a buy or exit from a stock. It could make for frustrating losses and missed opportunities.
Add
