All you need to know about scalping or scalp trading in crypto

By September 1, 2021March 29th, 20225 minute read
All you need to know about scalping or scalp trading in crypto_WazirX

Scalping is one of the day trading methods that require intense TA (Technical Analysis) and discipline. Scalping is a highly intense but rewarding trading strategy if the trader is careful and practices flawless TA, and sticks to a predetermined system.

But, what exactly is scalping in crypto?

Scalping is a strategy that is used by traders who like to get in and out of a trade in a short amount of time, preferably less than a day. Traders who practice scalping are known as scalpers and are aiming to profit from small price moments. With the volatility associated with crypto, scalping is a high-risk, high-profit trading strategy relative to other markets. 

Scalpers tend to harvest limited profits from small but repetitive trades. Their goal is small but consistent profits over and over again. Many traders scalp to get a shot of adrenaline, and they generally use leverage to increase their buying power. Unlike usual day traders, scalpers rely on various technical indicators like support and resistance, RSI, and candlestick patterns. 

In scalp trading, positions are typically closed as soon as they become profitable; making a profit in the neighborhood of 2% is enough. The key is to repeatedly make small profits until the daily target quota is achieved.  

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Scalping: Basic Prerequisites

  • Strong Technical Analysis skills
  • Charting tools
  • Capital management skills 
  • Discipline
  • Trend line analysis

What is the difference between scalping in cryptocurrency and other markets?

Even though the concept of scalping throughout all market genres remains the same, scalping in cryptocurrencies is totally different. Below are some of the major differences between scalping in crypto and regulated markets. These differences are to be acknowledged, and scalping strategies are to be applied accordingly for a profitable scalping experience in the crypto domain. 


An unregulated market like cryptocurrency tends to be more volatile than other markets like the share market. A skilled scalper will seize the opportunity, take advantage of the volatility, and generate quick and relatively more profits with crypto. But high profit means high risk, and hence the chance of a loss is also high. 


Markets like Forex require an intermediary or mediator to regulate the transactions, leading to a higher cost of transactions since a scalper takes on repetitive and sometimes multiple trades; transaction costs can go higher in other markets than crypto. 


Cryptocurrency markets are open 24X7X365; no matter what holiday it is, crypto never stops. Other markets like share and Forex are available at a fixed period, like certain hours of the day and weekdays. This opens a new window of opportunity, especially for scalpers, since there will be no delay in the market reaction to the news. Scalping is all about seizing the opportunity as soon as possible and open markets allow that. 


As mentioned above, cryptocurrency is not a regulated market; hence, there is a certain risk involved while trading with cryptocurrencies. However, Forex and the stock market are constantly monitored, and any kind of malpractice or abnormal volatility will be investigated.

What technical indicators are generally used for scalping?

Since fundamental analysis tends to work on the market slowly and can’t predict short-term and accurate movements, scalpers generally use technical analysis. Furthermore, precise technical analysis demonstrates high accuracy and hence is more relevant for them. 

Exchanges like WazirX provide all major technical indicators that scalpers generally use, making it easier for them and, most importantly, saves them a ton of time. 

With the appropriate amount of experience and knowledge, some scalpers usually use their own customized trading setup and sometimes trading indicators. But as a beginner, one can start by using the following trading indicators no matter what strategy they choose to practice:

  • Candlestick pattern
  • Trading volumes
  • Relative Strength Index (RSI)
  • Support and resistance
  • Bollinger bands
  • Fibonacci Retracement Patterns
  • Moving Average Convergence Divergence(MACD)
  • Order book analysis
  • Exponential Moving Average(EMA)
  • Trendline Analysis

While fundamentals help to understand the market state and where it will be heading in the long term, these technical indicators help scalpers provide good entering and exit points in different time frames. Each indicator doesn’t need to be always right, but using a collection of indicators will dramatically increase the accuracy of trades.

Some of the most famous scalping strategies

Range trading

Range trading is one of the most popular trading strategies among scalpers that involves monitoring the price movements(highs, lows) on a specific time frame, after establishing top and bottom, which will act as resistance and support, respectively. Buying at support and sell at resistance is generally the trading strategy, and if one of them is broken, traders can long or short accordingly. 

Bid-Ask spread

Bid-Ask spread scalping strategy involves exploiting the order difference between the bid and ask prices in the exchange order book. The profit is the difference between both of them. The volatility of cryptocurrencies makes it easier for scalpers to exploit the order book, but it still requires considerable capital and a keen eye to make substantial profits. 


Leverage is one of the most prominent scalping methods out there; it increases a trader’s buying power exponentially. In leverage trading, instead of buying from the available capital, scalpers can use their capital as a margin and take a leveraged position (nx). Here, n is a natural number signifying the multiplier effect they are adding to their capital, that could be as high as the exchange allows. Of course, these leverage positions carry a risk of liquidation; traders need to manage their capital accordingly. 

Some tips for beginner scalping traders

  • Always use stop-loss, especially in leveraged positions. 
  • Commit most of your portfolio (at least 80%) into investing, and holding strategy since scalping carries higher risks. 
  • Use an exchange with high volumes and low fees, like WazirX
  • As a scalper, on some blue days, prepare to face loss. 
  • Do not take over-leverage positions or over trade.
  • Practice strategies like portfolio rebalancing regularly.
  • Do not go against the market sentiments.
  • As a beginner, due to extreme volatility, try to scalp on top cryptocurrencies like Bitcoin and Ethereum
  • As a beginner, set and try to achieve daily targets. 
  • Learn to follow market waves.
  • Avoid FOMO or FUD.
  • Stick to one strategy at a time.
  • Even though it is not necessary, solid fundamental analysis might come in handy. 
  • As a beginner, start with a 30m to 1h time frame. 

Role of exchanges in scalping

Exchanges play an essential role in scalping in crypto since it is the platform a trader will use for scalp trading. Since a scalper has to open and close trades again and again, they prefer exchanges with low fees. One has to be extremely fast in closing and opening trades since volatility might not give them another chance; hence, the exchange must have high volumes, providing enough liquidity for multiple traders. 

WazirX is one of the leading exchanges in the market, with INR pairs that can be used for scalping because of the low fees, remarkably high volumes, and strong customer support. 

If you are a beginner in crypto or looking for short-term but confirmed profits, scalping is for you, but it is vital to DYOR. The key to becoming a successful crypto scalper is to enhance your charting reading skills, knowledge, and decision-making speed. But it is also important to remember that even losses are a part of the game. And for being a master in scalp trading, bearing losses is necessary too.

Can I Invest In Cryptocurrency?

Yes, with exchanges like WazirX, you may invest in cryptocurrency in India. To begin, go to the WazirX website and register. After that, you will receive a verification email. The link received by verification mail will only be available for a few seconds, so make sure you click it as quickly as possible. This will successfully verify your email address. The following step is to set up security, so choose the best solution for you. After you've set up the security, you'll be given the option of continuing with or without completing the KYC process.

What Is The Safest Cryptocurrency To Invest In?

Bitcoin has had the highest market capitalization, has been around the longest, has the most experienced development team, and has enormous network impact and brand recognition. As a result, while trading cryptocurrencies, the rate of return on Bitcoin is commonly used as a benchmark. However, the risks associated with cryptocurrencies remain, and the safest cryptocurrency for you depends on your analysis.

Is Cryptocurrency Safe To Invest In?

Cryptocurrency investments are subject to market risks, but if sufficient security measures are not taken, trading accounts can be maliciously accessed. Investments come with risks and uncertainties, and we cannot claim that any digital currency investment is risk-free. Buying and selling cryptocurrencies can be risky even if the trader is knowledgeable about the market and treats their coins carefully.

What Are The Best Cryptocurrencies To Invest In?

The best cryptocurrencies to invest in would be the ones you study and analyze in detail. Some of the most popular cryptocurrencies include Bitcoin, Ethereum, and many altcoins such as Tron, Ripple, Litecoin, etc.

Is Mining Cryptocurrency Legal?

Cryptocurrency mining can be time-consuming, expensive, and sporadically profitable. Mining has an appeal for many cryptocurrency enthusiasts as miners are paid directly with crypto tokens for their efforts. The legality of cryptocurrency mining is dependent on where you live. In India, there is no restriction on crypto mining.

Is Ethereum Safe To Invest?

The Bitcoin market is unquestionably more volatile than the stock market. This may not be the market for you if you are incredibly risk-averse. Ethereum, on the other hand, may be a terrific investment for you if you're a diamond-handed investor who won't lose sight of short-term losses. Ethereum is a relatively safe investment as it is also based on blockchain.

How To Invest In Cryptocurrency Stocks?

Cryptocurrency can be purchased in two ways: through mining or exchanges. The process of confirming and adding transactions to the blockchain public ledger is known as cryptocurrency mining. Cryptocurrency exchanges are another option. Exchanges make money by charging transaction fees, but there are alternative platforms where you may communicate directly with other cryptocurrency traders.

How Safe Are Cryptocurrencies?

Cryptocurrencies can be safe, but your crypto wallets can be hacked if proper security steps are not performed.There are also dangers and uncertainties associated with investments, and we cannot declare any virtual currency investment risk-free. Buying and selling cryptocurrencies does not have to be dangerous if the trader is well-versed in the market and treats his coins with care.

Is Bitcoin And Cryptocurrency The Same Thing?

Bitcoin is a cryptocurrency that was designed to facilitate cross-border transactions, eliminate government control over transactions, and streamline the entire process without third-party intermediaries. The absence of intermediaries has resulted in a significant reduction in transaction costs. Satoshi Nakamoto, the creator of Bitcoin, created the first cryptocurrency in 2008. It began as open-source software for money transfers. Since then, plenty of cryptocurrencies have emerged, with some focusing on specific fields.

Are Cryptocurrencies A Good Investment?

Cryptocurrency has the potential to make you extremely wealthy, and the potential to cause you to lose your money. Crypto assets, like any other investment, come with many risks and potential rewards. Fundamentally, cryptocurrency is an excellent investment, particularly if you want to gain direct exposure to the demand for digital currency.

Who Invented Cryptocurrency?

Satoshi Nakamoto invented cryptocurrencies and the technology that makes them function in 2009. The presumed pseudonymous individual or persons who invented Bitcoin used this identity. In addition, Nakamoto created the first blockchain database. Even though many people have claimed to be Satoshi Nakamoto, the person's identity remains unknown.

Are Cryptocurrencies Legal In India?

In India, cryptocurrency is legal, and anyone can buy, sell, and trade it. Because India lacks a regulatory system to regulate its operations, it is presently uncontrolled. According to the Ministry of Corporate Affairs, companies must now document their crypto trading/investments inside the financial year.

Is Pi Cryptocurrency Safe?

Pi Network (PI) is the newest digital token to catch the cryptocurrency community's interest, even before it has wholly debuted. Some users see it as a chance to get engaged in a cryptocurrency from the beginning and profit in the future, similar to how early Bitcoin adopters made huge profits by mining and keeping the coin. Other users have compared Pi to a worthless multi-level marketing (MLM) scheme.

What Is Virtual Currency?

Virtual currency is a type of uncontrolled digital currency that can only be used online. It is exclusively stored and transacted using designated software, mobile or computer applications, or unique digital wallets, and all transactions are conducted through secure, dedicated networks. Because digital currency is just currency issued by a bank in digital form, virtual currency is not the same as a digital currency. Virtual currency, unlike ordinary money, is based on a trust structure and cannot be issued by a central bank or other banking regulatory organization.

What Is The Meaning Of Crypto?

A cryptocurrency is a digital currency that is secured by the process of cryptography, making counterfeiting and double-spending almost impossible to happen. Blockchain technology is used to produce cryptocurrencies ( a distributed ledger enforced by a distributed network of computers). Cryptocurrencies are distinct in that a centralized authority does not issue them.

Which Cryptocurrency Is Best To Invest Now?

Litecoin has an 84 million coin limit and a 12.5 LTC block reward, which is more than other cryptos. Miners will find that mining Litecoin is faster than mining any other cryptocurrency because the average time to mine a Litecoin is under two minutes. Because of its increasing popularity, Litecoin is the best of all the altcoins. At WazirX, the current price of Litecoin is ₹12,410.22.

Which Cryptocurrency Is Best To Invest In 2021?

Many altcoins are flourishing to invest in. Some cryptocurrencies with great potential are Ether, Ripple, Tron, and more. Investors are trying to diversify their portfolios and are flocking to the leading cryptocurrencies. Many growing businesses are already accepting cryptocurrency as acceptable payment methods.

Is Cryptocurrency Banned In India?

No, cryptocurrency is not banned in India. India has seen its ups and downs in the crypto sector concerning its legal status. The Reserve Bank of India (RBI) issued a circular in April 2018 advising all organizations under its jurisdiction not to trade in virtual currencies or provide services to assist anyone in dealing with or settling them. A government committee proposed outlawing all private cryptocurrencies in mid-2019, with up to ten years in prison and severe penalties for anyone dealing in digital currency. The Supreme Court overruled the RBI's circular in March 2020, allowing banks to undertake cryptocurrency transactions from dealers and exchanges.

What Is Crypto?

Crypto or a cryptocurrency is a digital currency protected by cryptography, making counterfeiting and double-spending nearly impossible. Blockchain technology is used to produce cryptocurrencies (a distributed ledger enforced by a distributed network of computers). Cryptocurrencies are distinct in that a government does not issue them. The word "cryptocurrency" refers to the encryption methods employed to keep digital currencies and the network secure.

Is Crypto Legal In India?

Cryptocurrencies are legal in India, and anyone can purchase, sell, and exchange them. It is currently uncontrolled, as India lacks a regulatory structure to oversee its operations. Per the Ministry of Corporate Affairs, companies must now record their crypto trading/investments within the financial year. In cases where a person receiving the gains is an Indian tax resident, or the cryptocurrency is regarded as domiciled in India, cryptocurrency transactions have been taxable in India

How Many Cryptocurrencies Are There?

There are over 5000 other digital currencies available on the internet in addition to Bitcoins. The only problem is that they haven't gotten the users' attention. Besides Bitcoins, a few other digital currencies have gained popularity among users. It's been more than ten years since Bitcoins were first released, and now they've achieved new heights thanks to their phenomenal success.

How To Invest In Cryptocurrency In India?

There are two ways of investing in cryptocurrency, mining and via exchanges. Cryptocurrency mining is the process of verifying and adding transactions between users to the blockchain public ledger. Purchasing cryptocurrency in India is a straightforward procedure where investors simply participate by registering with a crypto exchange such as WazirX. After registering for an account, citizens can trade multiple cryptocurrencies, store cryptocurrency in wallets, and more.

How Cryptocurrency Works?

Cryptocurrencies use cryptography technology to keep transactions and their units (tokens) secure. Cryptocurrency works via a technology called the blockchain. A blockchain is a decentralized technology that handles and records transactions across numerous computers. The security of this technology is part of its value.

How To Invest In Cryptocurrency?

There are two ways of investing in cryptocurrency, mining and via exchanges. Cryptocurrency mining is considered the procedure of verifying and adding transactions to the blockchain public ledger. Another option is via cryptocurrency exchanges. Exchanges generate money by collecting transaction fees, but there are alternative websites where you can interact directly with other users who want to trade cryptocurrencies.

Is Cryptocurrency Legal In India?

In India, cryptocurrencies are legal; anyone can purchase, sell, and trade cryptocurrencies. They are currently unregulated; India does not have a regulatory framework in place to regulate its functioning. According to the Ministry of Corporate Affairs (MCA), companies must now declare their crypto trading/investments during the financial year, according to the Ministry of Corporate Affairs (MCA). Cryptocurrency transactions have been taxable in India when people receiving such gains are Indian tax residents or where the crypto is considered to be domiciled in India

What Is Cryptocurrency?

A cryptocurrency is a digital currency secured by encryption, due to which chances of activities such as counterfeiting and double-spending taking place get close to impossible. Cryptocurrencies get created on blockchain technology ( a distributed ledger enforced by a distributed network of computers). Cryptocurrencies are unique in that they do not get issued by any central authority. The term "cryptocurrency" comes from the encryption techniques used to keep digital currencies and the network safe.

Disclaimer: Cryptocurrency is not a legal tender and is currently unregulated. Kindly ensure that you undertake sufficient risk assessment when trading cryptocurrencies as they are often subject to high price volatility. The information provided in this section doesn't represent any investment advice or WazirX's official position. WazirX reserves the right in its sole discretion to amend or change this blog post at any time and for any reasons without prior notice.
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