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Group D - Assignment

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18 views2 pages

Group D - Assignment

Our assignment

Uploaded by

globforexinternational
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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Scalping

Done by : ABRAHAM, THEOPHILUS, VINCENT, DAVID, EMMANUEL

Scalping is a high-frequency trading style that aims to profit from small price movements in the
market. Scalpers typically open and close trades within a short timeframe, often within seconds
or minutes, and look to capture small profits from these fluctuations.

Strengths of Scalping:

1.Potential for High Returns: While individual profits per trade are small, the high frequency of
trading allows scalpers to accumulate significant gains over time.

2.Market Neutrality: Scalping can be profitable in both rising and falling markets, as it focuses
on capturing short-term trades.

3.Flexibility and Adaptability: Scalping can be employed across various markets and assets,
including stocks, forex, futures, and cryptocurrencies.

4. Lower Risk of Large Losses: Scalpers typically use tight stop-loss orders, limiting potential
losses.

Weaknesses of scalping:

1.Transaction Costs: High trading frequency can lead to significant trading commissions and
fees.

2.Market Volatility Sensitivity: Scalping relies on volatility for profits, so periods of low volatility
can be challenging.
3.Risk of Slippage: Fast-moving markets can lead to slippage, where orders are executed at
prices worse than anticipated.

4.Technological Dependence: Scalping heavily relies on technology and can be disrupted by


internet outages.

Suitable for;

- Experienced traders

- Focused individuals

- Emotionally stable

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