Day Trading vs Scalping – Compare & Find the differences & common factors

Two popular terms from trading arena may get anyone confused. This article is inclined towards providing you information on Day Trading vs Scalping.

In a world of trading financial assets, everybody has their strategies which they rely on.

Sometimes, those strategies are self-made while sometimes, they get inspiration from other successful investors.

What you should realize is there are no right way or wrong way; it is just a way by which you either earn a profit or may incur a loss.

Meanwhile, today we will be talking about two such strategies which are almost similar; however, there are some fundamental differences among them as well.

Yes, we will be discussing Day Trading and Scalping. First of all, you should have some core knowledge of what those forms of trading are, and then we will try and figure out the significant differences.

So, let us kick in.

Understanding Day Trading and Scalping

Day Trading is one of the dynamic forms of investment today.

As the name suggests, the core idea is to perform trading of financial assets within the working hours of one calendar day. That is why some people also call it Intraday trading.

So, if you are an intraday trader, you tend to buy stocks, commodities, currencies, etc. with an intention to sell them at a higher price with the same day.

Such traders aim to anticipate market movement and earn a maximum profit margin.

The concept of Scalping is not the same when compared to Day Trading. Here, the fundamental idea is to earn minimal profit margins by doing quick deals.

The trading frequency for such kind of trading can be less than 1 minute or can be 1-hour max. The moving of Scalping traders is to generate small yet frequent profit margins.

So, at the end of the day, they can generate a hefty income via trading.

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Day Trading vs Scalping

Now once you have a general idea of what Day Trading and Scalping are, we can move on to the core differences. So, let us explore that below:

Timeframe – Day Trading vs Scalping

Many people sometimes get confused about whether a trader is day-trading or scalping.

One of the significant differences, though is a proper understanding of the timeframe that both kinds of traders take.

As the day traders aim to earn the maximum profit in one day, they tend to rely on 1-3 traders which they perform all over the day as long as the market is open.

That is not that case if someone has a Scalping mentality. The Scalpers trades every minute, sometimes every second.

They set themselves for plenty of trades every day depending upon the market status.

They accumulate the daily target income through small but numerous deals, earning small profits from every trade they perform.

So, we can clearly see a contrast in timeframe even though both Day-Trading and Scalping occurs in one day.

Experience level – Day Trading vs Scalping

If you can sense the skill difference in both forms of trading, you should realize that it takes a lot to market understanding to become a successful Scalper.

In contrast, even a beginner with minimal trading knowledge can try and may get success in Day-trading.

People who take the scalping approach must do a lot of market research to get the desired result. They can perform hundreds of trades every day to accumulate the income they are looking for.

On the other hand, one profitable deal is all a day trader wish for. What you should understand is the motive of both forms of trading is very distinct.

So, for a Day trader, as soon as the desired target amount reaches, they sell the assets to gain the maximum profit, which they do with around a maximum of 2-3 trades, in a day.

Account Funds – Day Trading vs Scalping

As of now, you should figure it out that Scalping is significantly riskier than Day-trading.

Prior to all the knowledge that you need to become a Scalper, you should know that the funds that you need in performing both forms of trading are massive.

Since a Scalper requires a higher number of setups to get a higher win ratio, they need more funds when compared to a Day trader.

A Day trade is pretty much straight forward, as you can tell whether a particular day is good or bad for the trader.

When compared to Scalping, there are so many factors that involve, which eventually determines whether the day was a hit or a flop.

As the risk factor in Scalping is significantly high in comparison to Day trading, you need more funds in your account to sometimes compensate, or invest more at times.

Day Trading vs Scalping – Common Factors

Not everything among the two forms of trading is indifferent. There are some notable similarities between the Day Trader to someone who does Scalping.

They are as follows:

Similar Technique

The technique part is pretty much the same. Meaning, just because you are decent in Scalping, doesn’t mean you don’t know how Day-trading works, and vice-versa.

So, any company would love to acquire both the traders provided they have adequate skills.

Taking Risks

It doesn’t matter you do Scalping or Day trading, trading financial assets on an Intraday basis is always risky. So, both parties should have contingency plans chalked out before investing.

Number of Trades

The market condition may resist or tempt you to change your basic intent while you trade. So, if you are a Day trader, typically look for 1 – 2 trades every day.

If there are opportunities, you may do 10 – 12 trades and break your usual norm to capitalize the market conditions.

Simultaneously, if you are well-versed in Scalping, but can see that the market condition for that very day is not suitable for taking the usual route, you could resist the number of trades to 1 – 2.

Conclusion – Day Trading vs Scalping

In the end, it is pointless to duel on the statement that one form of trading is better than the other. If you are good at Scalping, you will earn well.

The same rule applies if you do Day trading. One interesting fact is both forms of trading are concepts. So, you can be flexible and adapt to whichever suits best for a particular day.

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