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Author Topic: Can anybody explain to me the concept of Scalping  (Read 1716 times)
Seal
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January 12, 2012, 02:28:07 AM
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From what I've googled, I understand that scalping helps lower spreads but ultimately, aren't you just betting upon a upward or downward price movement?

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bitscalper
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January 12, 2012, 03:22:18 AM
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From what I've googled, I understand that scalping helps lower spreads but ultimately, aren't you just betting upon a upward or downward price movement?

Scalping originates from Forex and refers to the activity of grabbing profits inside small time windows taking advantage of price movements. The trick is that you are not really betting against the price, the true scalping (referring to forex in this example) requires you to use time frames of 1 minute, stay in front of your monitor constantly and be very very responsive to the price movements (in 1 minute you will see a lot of them) . You in fact need to just open and close hundred of transactions on a day , or thousands, or tens, it's depending on your strategy, buying low and selling high, but in a very fast way and taking every time a very small profit, but at the end of the day a trained scalper always make money. Bitscalper.com is named like that as a pseudo-joke because we do not practice automated true scalping with Bitcoin at the moment. Bitscalper works with arbitraging and some other strategies but not "pure" scalping. Hope this reply helps.
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January 12, 2012, 03:37:33 AM
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scalping is when you cut a nice line across the top of someones forehead and then with a firm yank rip the top of someones head off

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my portfoio: http://windowsofamind.com
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January 12, 2012, 05:05:00 AM
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The trick is that you are not really betting against the price, the true scalping (referring to forex in this example) requires you to use time frames of 1 minute, stay in front of your monitor constantly and be very very responsive to the price movements (in 1 minute you will see a lot of them) . You in fact need to just open and close hundred of transactions on a day , or thousands, or tens, it's depending on your strategy, buying low and selling high, but in a very fast way and taking every time a very small profit

Interesting site, looks well thought out.

I'm not sure I follow... if you are buying low and selling high, that won't necessarily work if the price is falling as the ask you place may not fill? I'm just trying to think of this in terms of trading bitcoin.

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January 12, 2012, 05:07:10 AM
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I'm not sure I follow... if you are buying low and selling high, that won't necessarily work if the price is falling as the ask you place may not fill? I'm just trying to think of this in terms of trading bitcoin.

Right... if you use a naive strategy of bid/ask spread you will always wind up on the wrong side of big moves.  You can do better if you adjust the quantities slightly (buy more, sell less in bull markets, opposite in bear markets).

https://www.bitcoin.org/bitcoin.pdf
While no idea is perfect, some ideas are useful.
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Seal
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January 12, 2012, 05:23:16 AM
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I'm not sure I follow... if you are buying low and selling high, that won't necessarily work if the price is falling as the ask you place may not fill? I'm just trying to think of this in terms of trading bitcoin.

Right... if you use a naive strategy of bid/ask spread you will always wind up on the wrong side of big moves.  You can do better if you adjust the quantities slightly (buy more, sell less in bull markets, opposite in bear markets).

So going back to my original question:
ultimately, aren't you just betting upon a upward or downward price movement?


From what you are saying, then yes, you pretty much are betting on the bull/bear market direction... if that is the case, then why would people choose to scalp, as opposed to buying and holding for profit in a bull market, or selling short in a bear market?

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January 12, 2012, 05:28:44 AM
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I would suppose the meaning is the same in trading as is used in "scalping" tickets. A ticket scalper buys many concert tickets gambling that the show will sell out, there will still be a high demand, and he will be able to sell the tickets for a profit. Sometimes it doesn't work out and they are stuck unloading tickets for less than face value when an un-sold-out concert still has tickets at the box office on event day. Replace "concert tickets" with any other commodity.

notme
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January 12, 2012, 05:34:19 AM
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From what you are saying, then yes, you pretty much are betting on the bull/bear market direction... if that is the case, then why would people choose to scalp, as opposed to buying and holding for profit in a bull market, or selling short in a bear market?

Scalping provides two advantages: many opportunities to take profits off the table and price stability

The role of the scalper is to provide a trading partners for people who just want to move coins now.  They buy/sell those coins on the assumption then can do the opposite trade soon enough and at least make back the commission.

https://www.bitcoin.org/bitcoin.pdf
While no idea is perfect, some ideas are useful.
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January 12, 2012, 06:47:54 PM
 #9

scalping is when you cut a nice line across the top of someones forehead and then with a firm yank rip the top of someones head off

In essence, you are taking a little off the top of the market movements.

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