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    Risk Management On Scalp Trades

    Uploaded by

    Faheem Haider
    This document provides guidance on risk management strategies for scalp trading. It recommends: (1) defining your maximum risk tolerance as a percentage; (2) taking profits quickly rather than treating scalp trades as day or swing trades; (3) using tight stop losses, no more than 2% below entry price, and raising them as the price moves in your favor. Additional tips include trading high volatility assets with high leverage but managing risks carefully, avoiding revenge or FOMO trades, and waiting for high-probability setups rather than chasing moves. The document outlines various patterns, indicators, and timeframes that can be used to identify potential scalp trade opportunities.

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    Download as PDF, TXT or read online from Scribd

    Risk Management On Scalp Trades

    Uploaded by

    Faheem Haider
    133 views5 pages
    This document provides guidance on risk management strategies for scalp trading. It recommends: (1) defining your maximum risk tolerance as a percentage; (2) taking profits quickly rather than treating scalp trades as day or swing trades; (3) using tight stop losses, no more than 2% below entry price, and raising them as the price moves in your favor. Additional tips include trading high volatility assets with high leverage but managing risks carefully, avoiding revenge or FOMO trades, and waiting for high-probability setups rather than chasing moves. The document outlines various patterns, indicators, and timeframes that can be used to identify potential scalp trade opportunities.

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    This document provides guidance on risk management strategies for scalp trading. It recommends: (1) defining your maximum risk tolerance as a percentage; (2) taking profits quickly rather than treating scalp trades as day or swing trades; (3) using tight stop losses, no more than 2% below entry price, and raising them as the price moves in your favor. Additional tips include trading high volatility assets with high leverage but managing risks carefully, avoiding revenge or FOMO trades, and waiting for high-probability setups rather than chasing moves. The document outlines various patterns, indicators, and timeframes that can be used to identify potential scalp trade opportunities.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    133 views5 pages

    Risk Management On Scalp Trades

    Uploaded by

    Faheem Haider
    This document provides guidance on risk management strategies for scalp trading. It recommends: (1) defining your maximum risk tolerance as a percentage; (2) taking profits quickly rather than treating scalp trades as day or swing trades; (3) using tight stop losses, no more than 2% below entry price, and raising them as the price moves in your favor. Additional tips include trading high volatility assets with high leverage but managing risks carefully, avoiding revenge or FOMO trades, and waiting for high-probability setups rather than chasing moves. The document outlines various patterns, indicators, and timeframes that can be used to identify potential scalp trade opportunities.

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    Risk management on scalp trades

    1) When scalping it is important to have an


    idea about the measured risks you are
    willing to take percentage wise in order to be
    profitable and minimize your risks.
    2) When scalping you must take your profits
    and exit. It is important not to confuse it
    with a day trade-swing trade models.
    3) Scalp trades are usually taken on lower time
    frames for instance between 1 minut-60
    minute time frames.
    4) Stop losses – It is very important to set a
    stop loss and no matter what the price action
    does, you must stick to it and get out even if
    you are loosing money.
    5) Stop losses must be tight when you are
    scalping and should not be placed lower than
    2%
    6) Scalp trades are usually taken on high
    leverage to maximize your profit percentage,
    this can sometimes become very risky but
    well worth it if you can manage your risk
    accordingly.
    7) Since the market is volatile, it can sometimes
    wick down to your stop loss and continue
    going upwards. Do not FOMO incase this
    happens and wait for a better entry.
    8) Usually if you don’t know where the stop loss
    should be placed, it could mean that your
    trade idea is not defined and you should
    probably wait and not enter into any
    positions.
    9) If you want to make the most out of scalping,
    you must always wait for the best
    opportunities to come to you instead of
    chasing them.
    10) Once you enter a position, raise your stop
    loss just as the price goes up. This way your
    trade will always be safe incase the price
    suddenly dumps or wicks down, you will be
    safe and never liquidated on your trades.

    Types of scalp trades


    1) Trading on pattern breakouts, for
    example, when you see a price breaking
    out of a symmetrical triangle, you can
    scalp the breakout both to the upside
    and to the downside. Technically
    whenever the price breaks a resistance,
    it usually comes down sooner rather
    later to test the previous resistance
    which has now become a support.
    2) You can use the oscillators to scalp
    trade, this can be RSI, MACD, STOCH
    RSI etc. Whenever RSI on lower
    timeframes are overbought or oversold,
    they are usually the best times to look
    for entries and hold them patiently
    depending on the exact timeframe.
    3) Moving average trading – You can use
    EMA 7 and EMA 21 to spot bull and bear
    crosses on both lower and higher
    timeframes, this usually is one of the
    best moving average trading strategy
    due to its higher accuracy rates. It is
    important to check relative strength
    index (RSI) to see if it is above level 50
    when the moving averages make a bull
    cross and overbought incase of bear
    crosses.
    4) Candle stick scalping from higher time
    frame to lower timeframes – Whenever
    you see a 15 minute candle retracing or
    is RED for more than 3 minutes, you can
    take the risk to short it on the lower
    timeframes and let it go for 6-8 minutes
    before you exit. This strategy is risky but
    works very well once you practice it and
    gain some experience trading this
    particular strategy.
    5) Same strategy can be applied if a 1 hour
    timeframe turns either red or green,
    there is always a chance to trade that
    setup for 10-25 mints. Exit your trades
    during that time-period.

    Scalping mistakes
    1) It is never a good idea to revenge
    trade your lost ones. FOMO gang is
    known for this mistake, they get into
    a trade that stops out then soon after
    they try to revenge trade their
    original idea which always turns
    against them.
    2) Not setting stop losses right and not
    raising them together with the price.
    3) FOMO trading
    4) No risk management
    5) Using very high leverage
    6) Entering into positions outside of
    buy and sell zones.
    7) Being greedy and asking for more.
    Read all the points carefully. We are soon going to
    give you scalp trades, managing your risks is the
    most important thing and that’s why we have
    created this document to help you do just that.
    Happy trading.

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