Pros And Cons Of Scalp Trading
Scalp trading in a live trading room is no easy task
, my friend, in fact though scalp trading might be one of the most popular and common day trading strategies, it is also one of the hardest to get the hang of. It is as though scalp trading gets more complex by the minute! But at the end of this period of increasing complexity comes knowledge and somehow, everything falls into place but only for a patient few.Most other people get disheartened by the huge losses they have to incur or the set backs they have to suffer and get completely disillusioned. They start looking for other opportunities and personally, if you ask me, I think theyre making a smart decision, because scalp trading, which is an extremely risky profession is NOT for everyone; only those who have a really good sense of the market whether instinctively or whether they have managed to cultivate it- should go in for this.
So do think twice before you venture into these troubled waters.
The Pros
Dont get me wrong, Im not trying to discourage you from following your dream here, not at all, Im just telling you to be careful. There are many pros of scalp trading. These include:
When youre scalp trading, what youre doing is using and looking for minimal data from the market.
With the help of stop gaps and stop losses, you can actually prevent yourself from incurring very large losses.
If youre smart and like to use emini futures contracts, you can trade for a fraction of the price which you otherwise would have to pay.
Another advantage of the emini futures contracts is that it enhances focus, which gives you a greater touch or a better learning experience since you start developing a feel for it. This is because when youre day trading the emini, youre looking at the same play at all times, so by tweaking and playing around with the same set of shares, you can figure out what works best and what doesnt.
Your exposure to the market also reduces considerably with eminis.
The Cons
At the same time, lets not forget the cons of scalp trading:
If youre not using eminis, youre going to have to give in a lot of focus and youre also going to have to learn REALLY fast, this could lead to undesirable stress. We all know that live trading rooms spell trouble sometimes.
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Emini futures contracts also have a big disadvantage, in terms of the leverage. If you dont have sound stock strategies, or a trading system which actually works, the advantage that the emini offers might well turn into your worst nightmare.
Stock trading, like any other thing in this world has its pros and its cons, so do make an informed decision before venturing into it.
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