What is Scalping Trading? All About Scalp Trading in Crypto
Scalping trading is one of the most intensive, yet also one of the most popular strategies among active crypto traders. Where swing traders capitalise on movements spanning days or weeks, scalping revolves around exploiting small price movements within minutes or even seconds. The goal? Numerous small profits that collectively yield an attractive result.
In this article, you will discover what scalping trading is, how it works, which strategies are popular, and what to look out for if you want to start scalping in the crypto market.
In Summary
To provide an immediate overview of what scalping entails, here are the key points in brief. This will help you quickly determine if this trading style suits you.
Scalping trading focuses on fast, short trades that profit from minute price fluctuations.
Traders use low timeframes such as 1-minute or 5-minute charts.
Successful scalping requires sharp timing, discipline, and insight into liquidity.
Important tools include indicators like EMA, RSI, MACD, and order book data.
Scalping is suitable for active traders who can act quickly and keep emotions under control.
What is scalping trading?
To understand exactly what scalping trading is, it is helpful to look at the objective behind this strategy: achieving profit from tiny price movements. Unlike other methods, scalping does not focus on trends over days or weeks, but on micro-movements within minutes or even seconds.
Scalping is a trading strategy where a trader attempts to profit from very small price changes within a short timeframe. A scalper often executes dozens to hundreds of transactions per day, each aiming for a profit of just a few per cent or less.
Where long-term investors rely on trends, a scalper focuses on micro-momentum: the moment the price briefly accelerates, after which they immediately take profit and exit.
This style of trading originated in the stock and currency markets but has become especially popular due to the high volatility and 24/7 nature of crypto.
How does scalping work in crypto?
Scalping in crypto operates based on speed, precision, and technical analysis. Traders use short timeframes to catch small price moves. This requires a good understanding of market structure, liquidity, and momentum.
Fast Trades on Low Timeframes
Scalpers trade on very short timeframes, usually between the 1- and 5-minute charts. They look for mini-trends or temporary liquidity spikes and often close positions within minutes.
Because each trade is small, scalpers typically use a higher trading frequency and often employ leverage, although this carries additional risks.
Capitalising on Small Price Movements
The focus is on identifying market inefficiencies, such as small spreads or moments where supply and demand are unbalanced. For example: if the price of Bitcoin makes a slight dip within an upward trend, a scalper might enter for a short rebound.
The Difference Between Scalping and Day Trading
Scalping is a form of day trading, but it is even faster and more intensive.
Day traders often hold positions for several hours.
Scalpers usually close them within a few minutes or even seconds.
Both strategies avoid overnight positions, but scalping requires more focus, speed, and precision.
Advantages and Disadvantages of Scalping
Every strategy has strengths and weaknesses. Scalping offers many opportunities but also requires a high degree of discipline and control. Below you can read about the main pros and cons.
Advantages of Scalping
Many Trading Moments: Opportunities arise continuously, especially in volatile markets.
Quick Results: Profit or loss is clear within minutes.
No Overnight Risk: Positions are open briefly, so no worries about news or market updates while you sleep.
Useful for Experienced Traders: Offers a platform to master technical analysis in detail.
Disadvantages and Risks of Scalping
High Stress and Concentration: Decisions must be made within seconds.
Transaction Costs: Many trades mean higher fees.
Small Margins: One mistake can wipe out multiple small profits.
Technical Requirements: Requires fast internet connection and reliable trading software.
Popular Scalping Strategies
There are various ways to apply scalping. The right strategy depends on your trading style, experience, and risk tolerance. Below are the most commonly used methods.
Market-Making Scalping
The trader simultaneously places buy and sell orders around the current price, profiting from the spread and small price fluctuations. This method works best in markets with high liquidity.
Range-Based Scalping
When the price moves within a narrow range, scalpers buy at the bottom (support) and sell at the top (resistance).
Trend-Following Scalping
Here, the scalper follows the short-term trend. As soon as the price moves in a strong direction, they enter on pullbacks, which are small corrections within the trend.
Scalping with Volume and Volatility
Volume is crucial. Sudden spikes in trading volume can indicate momentum, which scalpers use for quick trades.
Automated Scalping with Bots
More and more scalpers use trading bots that execute trades automatically based on set parameters. This reduces emotional decisions but requires good knowledge of strategy and risk.
Important Indicators for Scalping
Indicators help scalpers recognise trends and momentum in the short term. They support decisions but should always be combined with market insight.
Moving Averages (EMA 9/21)
The Exponential Moving Average (EMA) reacts faster to recent price movements than a standard MA. Many scalpers use the 9- and 21-EMA to identify short trends and entry points.
RSI for Quick Momentum Shifts
The Relative Strength Index (RSI) helps recognise overbought (above 70) or oversold (below 30) situations in the short term.
MACD on Low Timeframes
The Moving Average Convergence Divergence (MACD) shows trend changes on short timeframes. A cross between the MACD lines can be a signal for a short trade.
Order Book, Liquidity, and Spreads
A good understanding of the order book helps in recognising where large buy or sell blocks lie. The spread (difference between bid and ask price) is also important: the smaller the spread, the more favourable for scalping.
Practical Example of a Scalp Trade
An example clarifies how scalping works. Below you see step-by-step what a scalp trade might look like, from setup to exit.
Determining the Setup
A trader looks at the 1-minute chart of Ethereum. The price is moving sideways between €2,000 and €2,010, with slightly increasing volume.
Entry Point and Timing
As soon as the price rises above €2,010 with increasing volume, the trader places a long position.
Setting Stop-Loss and Micro Take-Profit
The stop-loss is set just below €2,005, and the take-profit at €2,015, a ratio of approximately 1:1.
Exit Strategy
Within two minutes, the price reaches €2,015, and the trader closes the position with a small profit. By repeating this multiple times a day, the trader builds a consistent result, provided losses remain limited.
Risks of Scalping Trading
Scalping is fast but also demanding. Without a plan and discipline, small losses can quickly accumulate. It is important to understand these risks thoroughly before starting.
High Stress Due to Rapid Decisions
Scalping requires lightning-fast choices. Without a clear strategy, this can lead to impulsive trading and emotional errors.
Slippage and Fees
During fast price movements, an order may be executed at a worse price than expected (slippage). Add trading costs (fees) to this, and profit margins can shrink.
Overtrading and Emotional Errors
Because scalpers trade frequently, the risk of placing too many trades is high. Discipline is essential to prevent losses from escalating.
Scalping vs. Other Trading Strategies
Scalping is not the only trading style in crypto. To choose a strategy that suits you, it is useful to know how scalping differs from other methods.
Scalping vs Day Trading
Day traders take fewer trades, capitalising on larger price movements. Scalping requires more focus but provides quicker feedback.
Scalping vs Swing Trading
Swing traders hold positions for days or weeks; scalpers only for minutes. Swing trading is calmer but offers fewer opportunities per day.
Scalping vs Long-Term Investing
Investing revolves around fundamental analysis and confidence in long-term growth. Scalping is purely technical and focused on micro-movements.
Scalping in Crypto at Coinmerce
Do you want to try scalping yourself? Coinmerce offers a user-friendly environment where you can trade quickly and easily access advanced tools.
Advantages of Trading via Coinmerce
Coinmerce offers a platform where you can easily trade over 350 cryptocurrencies, with direct access to real-time charts, order books, and indicators. Thanks to a clear interface and European regulation, you can apply your strategy with confidence.
Tools and Features for Scalpers
Via the Coinmerce web app or mobile app you have access to:
Live price information and depth in the order book
Fast order execution
Limit and stop orders for risk management
Educational content in the knowledge base
Whether you want to start small or refine your existing strategy: Coinmerce helps you develop your trading style step by step, in a way that suits your pace.
Frequently Asked Questions about Scalping Trading
What exactly is scalping trading?
Scalping trading is a strategy where you capitalise on small price movements within minutes or seconds, with the aim of building up many small profits.
How does scalping work in crypto?
You trade on low timeframes using technical analysis and indicators, and close positions quickly to take profit or limit loss.
Is scalping suitable for beginners?
Yes, provided you start small, practice with a clear strategy, and learn to manage speed and emotions.
Which scalping strategies work best?
Popular methods include market-making, range trading, and trend-following.
Can you make money with scalping trading?
You can, but consistency and risk management are more important than the number of trades.
What is the difference between scalping and day trading?
Scalping is faster and more intensive; day trading focuses on slightly longer movements.
Which indicators do you use for scalping?
Commonly used indicators are EMA (9/21), RSI, MACD, and order book analysis.
How fast do you need to trade when scalping?
Decisions are often made within seconds. Therefore, many scalpers use pre-set strategies or bots.