Introduction

There are several trading styles that traders indulge in, in the market, depending on their preference. Of all these trading styles, traders who love the drive and excitement that comes with quick decision-making and fast-paced market action, scalping is a preference. 

When done right, scalping can prove to be very successful in helping capture small profits in a short time frame, consistently and helps traders make the most of the daily market movements. However, any trader planning to indulge in scalping needs to know that precision is extremely important when they are using scalping to trade. 

Having already explained what scalping trading means, here we will also take a look at the top 5 scalping strategies that you can use to generate greater profits:

5 Scalping Trading Strategies

Here is a look at some of the best scalping strategies that can help traders generate significant profits.

1. Price Action Scalping Strategy

• The main focus of this scalping strategy is to analyze price movements without any technical indicators. 

• Under this strategy, scalping decisions are made after price patterns, resistance and support levels and key patterns are analysed by traders

2. CPR Scalping Strategy

• The CPR or the Central Pivot Range Scalping Strategy uses an intraday indicator that is specifically used for scalping. 

• The main aim of the indicator is to pinpoint the potential key levels for the day. 

• This is done by taking into account the previous day’s high, low, and close prices of a stock

• When the price of a stock is above the CPR level, it will form a bullish candle and it indicates a potential buying opportunity. 

• The buying order can then be easily placed from atop the high of the candle. 

• When the price of a stock is below the CPR level, it will form a bearish candle and it indicates a potential selling opportunity. 

• The sell order, in this case, can be placed below the low of the candle.

3. VWAP Scalping Strategy

• The VWAP or the Volume Weighted Average Price strategy helps traders determine the average price at which a stock has traded on a particular day 

• The strategy is adjusted for volume and helps traders gauge whether the market is trending or consolidating. 

• Since the strategy provides traders with dependable entry and exit points, traders can better follow the intraday momentum.

• When the price is above VWAP, traders can enter the trade and when it's below, they can exit it. 

• In this strategy, the stop loss can be placed a little over or below the VWAP.

4. Open High Scalping Strategy 

• With the help of the open high scalping strategy, traders can utilize the ongoing momentum of a stock.

• In such a situation, the stop loss can trail.

5. Candlestick Pattern Scalping Strategy

• In this strategy, candlestick patterns like Hammer, Doji and Engulfing are used.

• This is done to help predict short-term price movements. 

• The pattern is usually sought after near resistance or support levels to carry out quicker trades.

• Under the Bullish Candlestick Pattern, traders or scalpers can use Hammer and Bullish Engulfing patterns and enter buy trades.

• Under the Bearish Candlestick Patterns, traders or scalpers can use the patterns to indulge in short-selling

• Traders can exit the trade when the price of the stock reaches the next resistance level. They can also exit after they have achieved the profit target they had set

• The stop loss can be placed below the low or above the high of the candlestick pattern.

Conclusion

After understanding scalping trading's meaning, it is important to figure out the strategies that work best for you when it comes to the process of scalping. Equipped with the right strategies, the chances of generating high returns with less potential for loss always exist. However, it is important to understand that scalping, even with its adrenaline rush, can be quite risky when not done well. This is why it is important to also know its drawbacks before deciding to take the plunge.