Best 5 Minute Scalping Strategies for Bitcoin

Top 5 Scalping Strategies For Trading Bitcoin

Every bitcoin trader has their own unique style and there is no one single perfect bitcoin trading strategy. While one trader would rather play the long game and find the perfect trade entry spot, some legends find quick moves and small wins exhilarating.

Scalping Small Wins With Minimal Risk

At the end of the day, each trader only needs to make more profits while exposing their trading capital to minimal risk. Scalping is one of a kind bitcoin trading strategy that chases frequency of trade rather than mass price swings.

By leveraging quick-fire trading movements, the scalper will with no doubt add sizeable value to their trading capital in the long run. Scalpers are short-term strategy traders that keep tabs on the market’s minute price movements to get in on trades.

Bitcoin’s high volatility makes it an excellent scalping strategy trading asset. Bitcoin scalp trading can be particularly potent when infused with leverage. Scalpers will open diverse trades, make tight stop losses to lower risk, then use leverage to magnify their wins.

To this end, scalping is an excellent strategy for traders who are looking for a much more involving strategy than good old long-term BTC HODLing. This strategy will lower the risk of holding on to a single crypto asset for an extended period. Speed and consistency are vital to scalping success.

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5 Minute Scalping Strategies To Test In 2021

Scalpers open and close trading positions every five to ten minutes. These short-term trades enhance the chance of profit and lower risk.

While some hawk-eyed traders perform manual scalping, continuously monitoring the market’s movements, some traders go for the more relaxed automated scalping. Battle-hardened scalpers, on the other hand, perform intuitive scalping, leveraging experience and their second sight to trade.

Here are a few 5 minute Bitcoin scalping strategies to try out in 2021:

1. Range Trading

Crypto markets are highly volatile. Their prices fluctuate every other minute. Range trading allows scalpers to buy and sell at support and resistance levels. It is the process of capturing the difference between two price levels within a brief window.

Scalpers first need to study technical data and pick out resistance and support levels. Technical analysis will provide data on volume trends, support, resistance, and moving averages. They can then choose to go long or short within a range.

A trader will open their positions at support and sell at resistance levels. They can alternatively, time a low entry price position within a range and then go long using limit orders.

2. Arbitrage

Bitcoin arbitrage means buying and selling bitcoin simultaneously but in different exchange platforms or locations to benefit from the price difference. As an illustration, buy bitcoin at a lower price in exchange A, then sell it at a higher price on exchange B.

The four most common arbitrage methods are spatial, triangular, statistical, and flash-loan arbitrage. Spatial arbitrage is the most popular of all arbitrage opportunities. Spatial arbitrage leverages crypto assets price differences in various exchanges to make a kill.

With it, scalpers purchase cryptocurrencies from one exchange, then move them to a different exchange and sell them at higher prices. This arbitrage opportunity has disadvantages, such as transfer times, fees, and spread costs, which eat away at profits. That said, it is as easy as pie, and newbie traders can try it out as part of their scalping training.

In triangular arbitrage, traders trade the price differences in three assets to make a profit. For instance, you can exchange bitcoin for litecoin. After that, convert your litecoin to ether and finally trade your ether back to bitcoin, using each asset’s volatility to make a profit.

In statistical arbitrage, traders benefit at scale through the use of bots, quantitative data models, and complex trading algorithms. Flash-loan arbitrage, on the other hand, allows scalpers to borrow trading capital from decentralized exchanges.

High on liquidity, scalpers then switch cryptocurrencies instantly in and out of one transaction, profiting from these quick movements. Flash-loan arbitrageurs have made massive profits in the DeFi space.

3. Spread Trading

Spread trading (relative value trade) opens long and short trading positions simultaneously. The spread is the difference between the long and short trades. In spread trading, the scalper trades the price difference between two cryptocurrency assets. As an illustration, you can trade the LTC/BTC cross pair and make a profit on the spread.