Day Trading- Scalping for Profit
Hello friends, in this particular video we are going to talk about Scalping for Profits as a Day Trading Strategy. So, to start with, we are going to explain what is scalping and how this is going to be useful for your short term profit? So, we are going to cover about all the points. So, let us start with the fact, what is scalping? So, typically a day trading strategy that allows you to make profits on extremely small price movements, is called scalping. That is, you enter and exit a stock within seconds or minutes for quick profits. So, this scalping process will make many trades and aim for smaller profits on each. For example, let us take an example, of yourself, you’re interested in short term profit and we are going to trade within a day many times. For example, if you have trade many times within a day and this is for scalping. Because you are investing in short term profit, with the way the stocks are in the market. So, this way you are going to make short term profit and you can make short term profit many times within the day which is called scalping. Now, let us talk about factors scalping considers? For example, whenever you are doing scalping what are those factors that we need to consider? So, most important factor is bid ask spread. scalping is all about achieving the profit. To achieve profits scalpers look to take advantage at of changes in a security bid-ask spread. We are going to explain in more details in the next slide you just take a note that this is one of the most important factor in that scalp. Scalper will always consider over here, so, scalper’s primarily use the market’s prices to make their trading decisions. A good scalper also use one or more technical indicators because if you are just going to rely on this aspect and you just did not do any technical analysis or any consideration of any technical indicator then it might be a problem for you. So, a good scalper will always be careful with this extra precautions. Now, we are going to explain you how scalping works? And how it makes you profit. This slide is very important for you, let us consider situation first in the spread value between the bid and the ask price is wider than usual. So, if this is the case, just bid and ask is having wider spread value here you can see that people who want to buy will be more than the people who want to sell because the spread value is more which means the bidder have more and the ask has ask value is gaining more and if the spread value is clearly more than it clearly indicates that more people wants to buy that stocks. So, here the scalper will do complete opposite for example, we already have the stocks of that particular company so what the scalper is going to do is the scalper is going to take this signal as a sign to sell. So, now you must be little bid surprised why this scalper is doing opposite. Because you are focused is all about making short term profits and for example if you see here more people are looking to buy these stocks, if more people are looking to buy these stocks, now your scalper is doing a good deal if it is telling here selling your stocks because here you’re going to make a profit because you have demand of the stocks of course the profit will be very less but yes that is the way the scalper works. Now, the second situation which is just opposite to this situation because spread between the bid and the ask is narrower than usual. Now, this is the situation where the bid value and the ask price is very narrow and the spread value that is just between this 2 is just too less. So, here the situation becomes something like this, here sellers slightly outnumbers the buyers. Now, in this particular situation, the sellers are more and the buyers are less. So, the scalper is again doing the same kind of thing here scalper will take this sign as to buy. So, here you see there are more sellers and your scalper is looking forward to buy. Now, here you will have to take situational caution because you will always need to consider your technically indicator as well. But scalper is doing it as a sign to buy because scalper knows they are most sellers and if we are going to buy as of now we are going to make a good profit whenever the spread value will be more and you are going to sell, just that time. So, this is the way, this scalper’s process works and this is the way we are going to make small profit each time. Yes, this is not a very good amount that you are going to make but this is clearly a profit that you’re going to make within just short span of time. It might be that they are going to make a small profit within just 15 minutes. So, this is the way scalper will help to make more profits within a day and you can do this process many times within a day as well. Now, we are going to talk about one of the example, how this trading look likes? For example, the scalper has to work quickly to make, yes this is the, the scalper will always have to work quickly to make many small trades. Because there might be, there might be sudden fall or rise in the stock value so you’ll always have to move quickly and you will have, always have to act accordingly. So, how does scalper, scalping as example would be, for example, let us talk about Mr.RAM. he may buy Indian 210.25 Rs stock, so for example per stock value is 210.25 Rs so, he’s undergoing through scalping process. He just found that he has just sold this stock within 220.52 Rs. So, he has made small profit over here. Now, he has again bought this stock within 250 Rs 30 paisa because again he’s going to sell stock at a higher value this is the way scalping works this the way he is making small profit like here. He’s made a small profit over here which is almost 10 Rs now again if you see this situation here he had just made a small sort of investment but again he is going to make a good profit if the value is something like this or more. So, this is the way the process will just keep on going and he’s going to make profit. So, again the fact remains the same that he has to have a low trade cost structure. he’s not going to make that big profit within this scalping process but yes he can make like this, we can repeat this activity many time within a day which can make him a good profit. Now, coming to the last part of this video, so what are the results we can expect from this scalping process? So, this is very important part whether you should be quite (optimized) about this scalping process or how you should be thinking about this scalping process. Now, we’re going to cover both the aspects..this point as well as this one point. So, scalping can appear easy because a scalper might make an entire day’s profit within a few minutes. Because you might be trading at that particular time when the whole scene has to take place. So, you might be earning entire this profit within just few minutes and that makes you a very smart trader. But it happens only with those who are very experienced in scalping and doing it every day. And again there has been a drawback as well scalping can be very difficult because there is very little room for error. In fact there’s no room for error. If you have just done that straight away. you are going to lose your money. So, you always have to be careful by doing the scalping process. So, we hope this video has been very useful for you because scalping for profit is always most of the day traders would like to do. So, have a nice day, okay, buh-bye.