Scalp Trading: Crypto
Status: Scaffolded - Content pending Last Updated: 2025-12-11
How Crypto Scalping Works
Crypto scalping uses the same parameters as equity scalping, with key differences for the 24/7 market.
Data Collection
| Data Type | What We Get |
|---|---|
| Current Price | Real-time snapshot |
| Historical Bars | 7 days of 1-minute candles |
| Bars to AI | 20 most recent bars |
| Indicators | RSI(9), EMA(9), MACD |
| Market Context | SPY, QQQ + ES Futures |
The ES Correlation Factor
Unlike stocks, crypto gets an additional check: S&P 500 futures (ES) correlation.
| ES Move | Impact on BTC |
|---|---|
| ES > +0.5% | Bullish bias for BTC |
| ES < -0.5% | Bearish bias for BTC |
| ES flat | No strong correlation signal |
Why ES? Bitcoin has shown increasing correlation with risk assets. When ES rallies, BTC often follows. When ES dumps, BTC often sells off.
Critical Difference: Time Stops
Crypto trades 24/7. There is no market close.
| Trade Style | Stock Time Stop | Crypto Time Stop |
|---|---|---|
| SCALP | 15-30 min | 15-30 min |
| DAY | Market close (4 PM ET) | 8-12 hours |
| SWING | 3-5 days | 3-5 days |
WRONG for crypto DAY: "Close by 4:00 PM ET" CORRECT for crypto DAY: "Close within 8-12 hours"
Analysis Flow
1. Data Collection (7 days, 1-min bars)
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2. Technical Agent analyzes:
- Support/Resistance
- RSI(9), EMA(9), MACD
- Chart patterns
- Volume patterns
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3. Macro Agent checks:
- ES Futures direction (correlation)
- BTC dominance
- Overall crypto sentiment
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4. Wild Card Agent checks:
- Exchange issues (FTX, etc.)
- Regulatory news
- Whale movements
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5. Supervisor synthesizes:
- Entry zone
- Stop loss
- Targets
- Position size (fractional coins)
Position Sizing for Crypto
Crypto allows fractional positions:
Risk Amount = Account Size × Risk Percent
Position = Risk Amount ÷ Stop Distance
Example (BTC):
- Account: $10,000
- Risk: 1% = $100
- BTC price: $100,000
- Stop: $500 below entry
- Position: $100 ÷ $500 = 0.2 BTC
In dollars: 0.2 × $100,000 = $20,000 position
(This is 2:1 leverage on a $10K account)
Supported Crypto Assets
| Asset | Symbol | Notes |
|---|---|---|
| Bitcoin | BTC | Primary, most liquid |
| Ethereum | ETH | Second most liquid |
| Others | Various | Liquidity varies |
Exit Rules
| Condition | Action |
|---|---|
| Price hits Target 1 | Exit 50% of position |
| Price hits Target 2 | Exit remaining 50% |
| Price hits Stop Loss | Exit 100% immediately |
| Time Stop (15-30 min) | Exit 100% at market |
Crypto-Specific Risks
| Risk | Description |
|---|---|
| 24/7 Gaps | Weekend gaps rare but occur |
| Exchange Risk | Centralized exchange failures |
| Liquidity Variance | Varies by time of day |
| Regulatory News | Government actions cause swings |
| Whale Manipulation | Large holders can move markets |
| Stablecoin Risk | USDT, USDC depegging events |
What the Trade Plan Looks Like
Direction: LONG
Asset: BTC-USD
Entry Zone: $99,500 - $99,800 (support bounce)
Stop Loss: $99,000 - $99,200 (below support)
Target 1: $100,500 - $100,800 (50% of position)
Target 2: $101,500 - $102,000 (remaining 50%)
Time Stop: 30 minutes max
Position Size: 0.15 BTC
Max Risk: $100 (1% of account)
Note: ES futures currently +0.3% - mild bullish correlation