What is cryptocurrency scalping and why do you need a VPS? A guide for beginner traders

If you want to make money on cryptocurrencies and are ready to act fast, you will need scalping. 

This strategy allows you to make profits on short price fluctuations. To do this, you need to make a lot of trades during the day. In this guide we will tell you what scalping is, how to organize it, why and how to choose the right server. If you are a beginner, do not worry - we will explain everything in order.

What is cryptocurrency scalping?

Scalping is a strategy in which traders make many trades during the day. The goal is to capitalize on small price fluctuations. This is the opposite of long-term investing, when assets are held for months. Scalpers, on the other hand, make a profit on every price movement up or down, regardless of the overall market trend.

Example: Let's say the price of Ethereum fluctuates between $3000 and $3010 for a few minutes (more often the fluctuations are lower). To make a quick profit, the scalper will buy Ethereum at $3000 and sell it at $3010 a few minutes later. He will conduct such trades multiple times in a day.

Why is scalping popular?

• Fast profits. Unlike long-term strategies, you see results immediately.
• Independence from the general trend. If there are short-term fluctuations, you can earn even in a falling market.
• Minimal risks. Scalpers are less prone to large losses due to the short time of holding a position.
• Accessibility. It is possible to trade on exchanges with minimal commissions, starting with a small capital.

How to start scalping?

Choose cryptocurrencies and exchanges

To start, you need to choose a cryptocurrency with high liquidity, such as Bitcoin or Ethereum, and an exchange with low commissions. Popular scalping platforms include Binance, Kraken and Coinbase Pro.

Master trading tools

Scalping requires quick analysis of market data. You will need price charts, indicators (e.g. moving averages, support and resistance levels) and other technical analysis tools.

Tip: Start with simple tools such as trend lines and RSI (Relative Strength Index) to learn how to recognize entry and exit points.

Use trading bots

Trading bots are used for scalping. They automatically execute trades based on the set parameters. This speeds up trading and reduces the probability of errors.

Example: You can set up a bot to buy Bitcoin if the price falls by 0.5% from the current level and sell it if the price rises by 0.5%.

Test strategies

Before launching a strategy, be sure to test it on historical data or in simulation mode. This will help you identify weaknesses and improve your approach.

Why do you need a VPS for scalping?

When you are just starting out, you can trade manually on your home computer. But as you get deeper, renting a server becomes an important part of the strategy. Here's why:

Minimizing delay

In scalping, every second can decide the success of a trade. If your computer is far away from the exchange's servers, the delay can rob you of profits. Renting a server that is closer to the exchange minimizes the delay and increases the chances of success.

Example: If you trade on the Binance exchange, a server located in Asia will have less latency than a home computer in Europe.

Round-the-clock bot operation

A trading bot must work 24/7. The lights may go out at your home or you may lose Wi-Fi. A rented server eliminates these problems.

Increased safety

Hackers are quietly attacking stock exchanges. A rented server with a high level of protection will prevent the same DDoS attacks.

How to rent a server for scalping?

LikeVPS is one of the best VPS rental services. It offers minimal latency, high performance, and 24/7 support. Here's why you should pay attention:

• Proximity to exchanges. LikeVPS rents servers located near major cryptocurrency exchanges, which minimizes latency.
• High performance. Servers provide enough resources for complex trading bots and fast data analysis.
• 24/7 support. You can count on assistance at any time, which is important when trading around the clock.

Selecting a server type

A VPS (Virtual Private Server) is a perfect fit. It offers dedicated resources and high performance. Users run game servers with thousands of visitors, let alone trading bots.

Server setup

After renting a server on LikeVPS, you will need to install an operating system (for example, Ubuntu or Windows Server) and trading programs such as MetaTrader or specialized trading bots.

Install a trading bot on the server, which will automatically execute trades according to the set parameters.

Monitoring and support

Use monitoring tools to track server performance and fix problems promptly. LikeVPS offers tools to monitor performance and connectivity.

Cryptocurrency scalping is a strategy that requires speed, accuracy and planning. It can bring a stable income if you approach the business with intelligence. 

Renting a server, for example, from LikeVPS, will increase the efficiency of trading, minimize delays and ensure the safety of your operations. Do not be afraid to experiment, learn and improve - success in scalping comes with experience.

Good luck with your trades! And remember: the future of your finances depends on your willingness to learn and apply knowledge in practice.