Altcoin Scalp Trading: The Good, The Bad And The Ugly

Journalist:
April 20, 2014

Despite the never-ending chaos and shenanigans surrounding big-name exchanges such as Cryptsy, altcoin scalp trading (aka “altcoin scalping”) is on the rise.

Altcoin scalp trading is a blazing-fast style of cryptocurrency trading specializing in volatile markets: quick momentum trades for small, albeit consistent profits.

As compared to the many hours conventional day trading and swing trading take to get in and out of position, altcoin scalping takes only seconds or minutes to get in or out of position. It’s no wonder this style of altcoin volatility trading is becoming more popular by the day.

Altcoin Scalp Trading Attractions

  • Massive round-the clock volatility trade opportunities on both sides of the trade (i.e. both uptrends and downtrends).
  • Short term market sentiment is considered more trustworthy (i.e. more predictable) than mid to long term market trends.
  • Long-term profitability (via strong risk mitigation).
  • Less perceived risk involved vs. holding a position for longer periods.
  • The ability to penetrate multiple markets multiple times a day.

Altcoin Scalp Trading Caveats

However, altcoin scalp trading is not suitable for everyone, as it involves a steady diet of patience, discipline and focus:

  • Sticking to the plan is paramount, regardless of the outcome.
  • Screen time is comparable to that of an avid online 3D gamer.
  • In its current state, altcoin scalping is unsuitable for ‘set and forget’ cryptocurrency trading.
  • A sizable cryptocurrency portfolio is required to realize significantly large small-gain profits.

Additional Altcoin Scalp Trading Considerations

  • Profit targets can vary widely (1%-10%), whereas a 1%-3% profit target is fairly common with altcoin arbitrage.
  • Risk mitigation is everything In altcoin scalping (i.e. faithful adherence to specific take-profit / stop-loss strategies).
  • Altcoin scalping decisions are made swiftly and decisively; and with no remorse.
  • Altcoin Scalpers understand the true value of quickly moving in and out of position (and cutting losses / locking in profits accordingly).
  • Altcoin Scalpers must have the focus of a Jedi, as impulsiveness leads to ruin.
  • The Altcoin Scalper’s trade charts are the 1 minute and 3 minute charts (whereas the 5 minute and 15 minute charts serve as confirmation indicators).
  • All of the same rules of Japanese Candlestick patterns and technical analysis (used on the bigger time frames) still fully apply.
  • Respectable gains from smaller market move require trading considerably larger positions.
  • Trend focus is mostly technical / price action-based (vs. fundamental analysis).
  • Trade size must constantly be monitored to avoid excessive drawdowns.

Closing Thoughts

Basically, altcoin scalp trading is the ‘mixed martial arts’ (MMA) of high-speed cryptocurrency trading styles. It combines the very best elements of profitable Candlestick patterns, binary options trading, Forex scalp trading (i.e. arbitrage), and spread betting all rolled into one.

And without a doubt, a growing understanding of Crypto-Forex is the true driving force behind the ever-increasing popularity of altcoin scalping.

However, honest exchanges will have to rapidly adapt in order to meet the voracious trade volume demand. They’ll also bring their game face if they’re to avoid the Epic Fails of altcoin exchange public relations.

Image Attribution: CatosDomain.com

Last modified (UTC): April 20, 2014 12:29

Mark M. Bravura

Mark M. Bravura is a freelance writer, entrepreneur and passionate advocate of bitcoin and it's related altcoin innovations. When not writing, he likes to search the interwebs for exciting new breakthroughs and projects within the bitcoin ecosystem.