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Pros and Cons Of Scalping Strategies

The creation of super-fast expiry time frames brought with it an abundance of new scalping strategies for use by binary options traders. The most basic of these is to simply lock in smaller amounts of profit on short-term price movements over and over again. When done successfully, traders can generate large amounts of profit relatively quickly. This of course requires that most trades finish in the money and that your trade volume is quite high.

While Sixty Second trades seemed a dream come true for the scalper, many traders did not know what they were missing until the Sell feature was introduced. This feature will allow you to sell select open positions while the trade is live. Some binary options brokers will only purchase out of the money positions, but digital options will also purchase select in the money positions, a fact which leaves the door open for scalping in its truest form.

The pros of using a scalping strategy within the binary options platform are quite obvious. With Sixty Second trades the option to Sell is not available, but these trades can provide quick and substantial profits each time they finish in the money. When using the Sell option together with basic Put/Call trades, you will not receive the maximum return. In fact, you could only earn a dollar or so above the purchase price. For many scalpers, this is perfectly fine, as the profit is in the repetitiveness of selling ITM options over and over again.

The cons of any scalping strategy are very obvious. There are no guarantees that the market will move as you have predicted. With Sixty Seconds trades that do not go your way, the entire investment amount is lost. When trying to use the Sell feature with basic binary options trades, the position will need to be sold while it is in the money. This leaves the possibility that the trade is never positioned in the money, or that you miss the optimal opportunity to sell when it is. There are a number of variables that could render a scalping strategy ineffective.

To scalp or not to scalp? It can work as an ongoing strategy, but for many, scalping is something that is only done from time to time. For example, you’ve entered into a trade and the asset price becomes quite volatile. Here, you could choose to sell in order to exit the trade with a small amount of profit. Ultimately, it’s really up to you, but do remain mindful of both the pros and cons before making any decision.


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