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Supercharge your Scalping with Smart Trades
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This article explains how to use all the features of Smart Trade to perform a ‘scalp trade’.
To show you how SmartTrade works, we’ll use an example trading scenario.
In the chart below, you’ll see the Bitcoin price breaking higher.
We’ll aim to capitalize on this bullish momentum by performing a scalp ‘long’ trade during a consolidation period on the low time frame, 15-minute chart.
On the chart below, you’ll see a trade idea with a risk to reward ratio of approximately 2:1.
In other words, we define our risk of $1 loss for a potential $2 reward.
The green dashed line on the chart at about $23,200 marks the high point of the local consolidation range that the price is bouncing from. The red dashed line represents our stop loss at about $21,800, at the bottom of the lowest candle wick since entering the consolidation zone.
The yellow line shows our possible entry at about $22,280 — which has proved a tentative short-term support where the price has wicked down and bounced from.
Additionally, the RSI indicator is beginning to show Bitcoin is approaching oversold and likely due a short-term bounce.
Ideally, we’d create this sort of trade on a Futures exchange to take advantage of leverage. But creating it on a Spot exchange will work as well.
Smart Trade setup
Click the SmartTrade (1) menu option. Select the Exchange account with your funds, choose USD or USDT for your Market currency and then BTC/USD or BTC/USDT for your Trading Pair (2):
Now choose the Smart Trade (3) trade type. This allows you to buy a coin you don’t own at a low price, to sell it for a profit at a higher price, known as a ‘long’ trade:
Here, you will see the controls for creating the trade to the specifications we outlined in our Trade Plan. You set your Entry (4), Take Profit (5) and Stop Loss (6) criteria on this part of the page:
Note: These screenshots are for illustrative purposes — some don’t quite match the Trade Plan we outlined earlier.
Creating our Entry order, enter the Price (7) we ascertained in our Trade Plan earlier, $22,280.
Turn on the Trailing Buy feature and set the value to 0.05%. The price may suddenly dip and ‘wick’ back up. We can take advantage of this with trailing buy, as it may get our trade a more optimal entry price!
Enter the Total (8) amount of funds to use for this trade. We are using $100 in this example:
On the Take Profit control, click the Split Targets button:
Enter 4% into the Take Profit (TP) target (9) and set the Volume to 75%. This means we will close 75% of our entry position when the price is 4% higher.
Click the Add TP Target (10) button to lock this setting in. Enter the next Take Profit target of 6% and use the remaining 25% of the position size in the Volume control.
Click the Add TP Target button again to complete our profit target entries (11):
The last step on the Take Profit settings is to enable Trailing Take Profit (12). Turn this option on and set it to -0.05%. This will follow price above our target — the idea here being to catch a little extra profit should the price pump past our original target:
Finally, we will set our Stop Loss (13) to -2.16%, according to our Trade Plan. We’ll also enable the Trailing Stop Loss (14) feature which will stay -2.16% away from the current chart price as it moves up and beyond our Entry price of the trade:
You can now click the Create Trade button and review the settings in the confirmation box:
If you’re happy with all the settings, click Confirm. Otherwise, close the box with the X button at the top right.
Congratulations! Your trade has been created. You can monitor trade progress (15) and click to view a chart with the Take Profit and Stop Loss levels indicated (16):
Conclusion and the Current Crypto Landscape in 2023
As we fast-forward to 2023, the cryptocurrency market has continued to evolve, offering both opportunities and challenges for traders. Scalping remains a viable strategy for those who can adapt to market conditions and use advanced tools like Smart Trade. Let's summarize some key takeaways from this article and explore their relevance in the current landscape:
1. Market Volatility: Cryptocurrencies are known for their volatility, which creates frequent price fluctuations. Scalping is well-suited to capitalize on these short-term movements. Traders must stay vigilant and monitor the market closely.
2. Risk Management: The trade plan emphasized risk management through the use of stop loss and take profit levels. This approach is crucial to protect capital, especially in a volatile market. Traders should continue to prioritize risk management in their strategies.
3. Automation: Automation tools, such as trailing buy and trailing take profit, can enhance a scalper's efficiency. These features help capture optimal entry points and additional profits. In 2023, traders have access to increasingly sophisticated automation options.
4. Diversification: While the article focused on Bitcoin, the cryptocurrency market offers a wide range of assets. Diversifying your trading portfolio can spread risk and open up more opportunities. Traders should explore various cryptocurrencies and trading pairs.
5. Education and Caution: The article concluded with a warning about the inherent risks of trading. This cautionary note remains relevant in 2023. It's essential for traders to continuously educate themselves, stay informed about market developments, and approach trading with caution.
6. Evolving Strategies: The cryptocurrency market is dynamic, and trading strategies must evolve accordingly. Traders should adapt their approaches based on market trends, regulatory changes, and emerging technologies.
In conclusion, scalping with Smart Trade is a powerful strategy for traders seeking to navigate the cryptocurrency market in 2023. While the basic principles outlined in this article remain valuable, traders must stay adaptable and continue learning to thrive in this ever-changing landscape. By combining a well-structured trade plan with advanced tools and a cautious approach, traders can aim to achieve success in scalping and other trading strategies in the exciting world of cryptocurrencies.
All that is left to do now, is to wait for your trade to play out, knowing that every eventuality is covered, and your trading plan fully automated.
Warning: Trading with your funds is inherently risky, and while the rewards may be great, so are potential losses you can incur. If the price of the cryptocurrency you are trading falls dramatically, you may suffer a loss if you sell at a lower price than you bought the currency for. 3Commas blog posts are written to be educational and should not be considered as ‘Financial Advice’.