4 Major Factors to Consider Before Scalping

Scalping is a trading system that aims to take advantage of tiny price movements or changes for profit.

It can be very profitable (if skillfully executed). And it is perhaps one of the most attractive strategies to traders.

Let’s look at some elements you should consider before you adopt it when prop trading:

1. Trading rules or requirements

Most prop firms do have rules governing trading hours, size and most importantly holding times.

At RebelsFunding for example, you must hold a trade for a minimum of 30 seconds.

Be sure to make your strategy align with this rule or requirement to achieve success.

2. Internet connection

Scalping requires speed in trade execution.

A slow or unstable internet connection would defeat this purpose and ruin your performance.

You need a strong & reliable connection for a smooth and productive process.

3. Market volatility

Market volatility is the life force of high frequency trading.

High volatility can provide numerous opportunities, but at the same time can increase your chances of failure.

Low volatility on the other hand often lacks quick swings and consequently low opportunities.

What should you do? Adapt to changing market conditions and find your balance.

Choose market situations that suit your strategy’s volatility “demand” and work with it.

4. Psychological suitability

The emotional highs and lows in a “quick-profit” system can be really overwhelming.

It requires discipline and intense focus to survive.

You need a solid plan; an unshakable mental courage to make quick decisions, remain calm under pressure, and manage your risks effectively.

With these factors addressed, you are sure to have a rewarding scalping experience.