Page 5 - Trading #101 Course – Part One: Trading Basics

TRADING #101 COURSE – PART ONE: TRADING BASICS /2017-10-06

2. Scalp Style

“Scalpers” take quick profits using technical and/or fundamental analysis to identify
trade entry, and trade exit. They use the “SAR” (stop & reverse) technique, and may
either be long or short almost all the time while using “SARs”.
A scalper can be a “day trader” or “position trader” and can “scalp” with a trend or
against a trend. Traders who are averse to authority figures tend to be better
“scalpers” in the market. Scalpers like quick action, and needs to be careful not to
overtrade. They should also be careful with trading due to anxiety issues.

3. Countertrend Style

Countertrend traders trade the corrections of an established trend. These traders
predominantly use trend reversal signals to time their trade entries and exits. They can
be day traders or position traders. The countertrend trader usually likes to be a “loner”
and move independently and is averse towards authority figures. He usually does not
flow with the crowd and therefore tends to feel uncomfortable going with the crowd of
traders in a trend.

My Definition of Scalping

There are many definitions of scalping the markets. Some traders believe that any form
of day trading at all is considered scalping.
This is not true, because you can day trade and scalp intraday charts like the 1-minute
and 5-minute charts but you can also position trade and scalp charts like the daily,
weekly, and monthly.

The distinction here is that the definition of scalping has nothing to do with the time
frame of trading; it has everything to with the style of trading. Scalping is a style of
trading where you take quick profits that occur in between pivot points in channeling
markets, regardless of whether the channel occurs on a 1-minute day trading chart or
on a daily position trading chart.
My definition: Scalping is any trading style that is not trend trading.

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