Which is more profitable trading?
I have seen a lot of people get into this but they seem to have missed why scalping is so profitable and why trading should be done when you have a clear idea of what you are doing.
Scalping is a form of high volume buying:
High volume traders want to hold a good price on a good volume of stocks. These trades can be very profitable (see: Fidelity).
These trades can be very profitable (see: Fidelity). They make the market more likely to move in the direction which the trader decides is “the direction” to move (see: Fidelity’s thesis trading guide).
Scalping is very profitable in the sense that you are able to buy an item from a higher price point than the one you’re currently sitting on (see: Fidelity’s thesis trading guide: scalping).
Scalping is often done to make up for a mistake you made (see: Fidelity’s thesis trading guide).
There has been a lot of debate about this topic over the years:
Here are some of my points:
These are strategies by which someone buys an item for a low price, sells it for an extreme amount of money and buys it back a little more.
For example if you buy a $10 stock for $10, selling it for $12 is a high-volume trading strategy. It’s usually pretty successful if the market moves towards your position. Since you own the stock at $10 (the low) you are able to sell it at $12.
I tend to avoid trading these types of things for several reasons: I tend not to be greedy (no more than 8 cents is too rich for me) and because of my desire to know what I am doing to earn the money from those trades, I am very careful to not make mistakes when selling.
These are strategies by which someone buys a stock for a low price, sells it for an extreme amount of money, and purchases it back a little more.
I will be the first to admit that I am not going to get rich using these strategies. But I do make money, mostly by making gains when stock prices drop (if the trade is a profit and not just a loss). The best examples of these type of trading strategies comes from low volume trading sites like Fidelity
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