4) Trading Strategy
What is Scalping
Scalping is the fastest and most intense trading style — buy, take a small profit, sell, repeat. Like a street food vendor who makes Rp 500 per piece but sells 500 pieces a day. Small gains stacked up become a mountain!
Definition
Scalping is a trading strategy that takes very small profits from many transactions in a short time, usually within minutes. Scalpers can execute dozens to hundreds of trades in a single day.
Simple Explanation (Analogy)
Scalping is like being a street food vendor. One piece makes just Rp 500 profit — tiny. But sell 500 pieces a day? That's Rp 250,000 profit. The key: be fast, be consistent, and never burn your food (big losses). One burned batch can wipe out the profit from dozens of good sales.
Indonesian Stock Example
In the Indonesian market, scalpers usually play liquid stocks like BBRI, BBCA, or TLKM that have tight spreads. For example, buy BBRI at Rp 4,500, sell at Rp 4,510 — Rp 10 profit per share. Buy 100 lots (10,000 shares), that's Rp 100,000 profit. Repeat 5-10 times a day and it adds up. But remember, broker fees and taxes must be factored in.
How to Use
- Choose stocks with high liquidity and tight spreads. In Indonesia, focus on LQ45 stocks, especially big banks and telcos.
- Use very small timeframes (1-5 minutes) and watch bid-offer levels. Get in and out quickly, don't 'fall in love' with a position.
- Set tight profit targets and cut loss levels before entry. For example, target +1-2 ticks, cut loss -1 tick. Discipline is everything in scalping.
Common Mistakes
- Not accounting for transaction costs. Broker fees + taxes in Indonesia can eat 0.3-0.5% per transaction (buy + sell). If your profit per trade is only 0.2%, you're actually losing money!
- Turning scalping into bag-holding. A true scalper must cut losses fast — holding a losing position isn't scalping, it's praying.
- Scalping illiquid stocks. Wide spreads can put you at a loss the moment you buy.
FAQ
What's the minimum capital for scalping?
Technically you can start with Rp 1-5 million, but scalping is most effective with capital above Rp 50 million because profit per trade is small — you need large volume so the results are meaningful after fees.
Is scalping suitable for beginners?
Honestly? No. Scalping requires fast execution, very strong emotional control, and understanding of bid-offer levels. Beginners should start with swing trading or investing to build a foundation first.