News scalping is the fastest form of news trading—entering and exiting positions within seconds to minutes, capturing the initial price spike from market-moving announcements. It's high-intensity, high-speed, and when done correctly, highly profitable.
This guide covers the strategies, techniques, and mindset required to scalp news events effectively.
What is News Scalping?
News scalping involves: - Ultra-fast entry within seconds of news breaking - Quick exit capturing the initial move (not the full trend) - High frequency multiple trades per day/week - Small targets 2-10% per trade typical - Strict discipline immediate exit if trade goes wrong
News Scalping vs. Other Approaches
| Factor | News Scalping | Swing Trading | Position Trading |
|---|---|---|---|
| Hold Time | Seconds to minutes | Hours to days | Days to weeks |
| Target Profit | 2-10% | 10-30% | 30%+ |
| Trades per Month | 20-50+ | 5-15 | 2-5 |
| Speed Required | Critical | Important | Less important |
| Analysis Depth | Minimal (react fast) | Moderate | Deep |
Best Events for News Scalping
Not all news is suitable for scalping. The best events have: - Clear, immediate impact - Predictable initial direction - High liquidity - Fast price reaction
Tier 1: Ideal Scalping Events
Exchange Listings: - Impact: 20-100%+ initial spike - Direction: Almost always up - Duration: Strongest move in first 5-30 minutes - Scalp target: 10-30% of expected move
Regulatory Decisions: - Impact: 10-30% moves - Direction: Clear based on decision type - Duration: Initial spike then extended reaction - Scalp target: First 5-15% move
Security Breaches: - Impact: 20-50% drops - Direction: Down (short or exit) - Duration: Immediate crash, then uncertain - Scalp target: Exit existing positions fast
Tier 2: Good Scalping Events
Major Partnerships: - Impact: 10-30% - Caveat: Quality varies, requires quick assessment
Influencer Signals: - Impact: 5-20% - Caveat: Shorter duration, faster reversal
Earnings Surprises: - Impact: 5-15% - Caveat: Often after-hours (stocks)
Only scalp events where direction is clear within 5 seconds of reading the news. If you need to analyze, it's not a scalping setup.
Core Scalping Strategies
Strategy 1: The First Spike
Capture the immediate reaction to news.
Setup: - News breaks with clear directional impact - You detect within 5 seconds - Liquidity exists to enter
Execution:
1. News detected
2. Market order to enter (speed > price)
3. Set immediate stop-loss (2-3% below entry)
4. Target: 5-10% gain
5. Exit via limit order or when momentum stalls
6. Maximum hold: 5 minutes
Example: - Binance listing announced - Enter within 10 seconds via market order - Price spikes 25% - Exit at +10% (capturing first portion of move) - Total time: 2-3 minutes
Strategy 2: The Momentum Scalp
Enter after initial spike confirms direction, ride momentum.
Setup: - News causes initial spike (confirming direction) - Brief consolidation or small pullback - Momentum resuming
Execution:
1. Wait for initial spike (don't chase immediately)
2. Wait for 1-2 minute consolidation
3. Enter when price breaks consolidation high
4. Stop below consolidation low
5. Target: Equal to initial spike or trailing stop
6. Maximum hold: 10-15 minutes
Advantage: Lower risk of entering at the absolute top of initial spike.
Strategy 3: The Fade Scalp
Scalp the reversal when news reaction overextends.
Setup: - Major news causes extreme spike (>30% in minutes) - Signs of exhaustion (volume declining, long wicks) - No fundamental reason for continued move
Execution:
1. Wait for clear exhaustion signals
2. Enter counter-trend (short after spike, long after crash)
3. Tight stop beyond the extreme
4. Target: 20-30% retracement of the spike
5. Maximum hold: 15-30 minutes
Warning: Counter-trend scalping is riskier. Use smaller size.
Strategy 4: The Multi-Leg Scalp
Take multiple small bites from a single news event.
Execution:
Trade 1: Initial spike
- Enter immediately, exit +5%
Trade 2: Momentum continuation
- Re-enter on pullback, exit +5%
Trade 3: Secondary news/reaction
- Enter on follow-up catalyst, exit +5%
Advantage: Captures more of the move with reduced risk per trade.
Scalping Execution Techniques
Speed Optimization
Every second matters in scalping:
Pre-Trade Preparation: - Exchange logged in and ready - Adequate balance available - Order entry screen open - Common trade sizes pre-calculated
Order Type Selection:
| Order Type | When to Use | Trade-off |
|---|---|---|
| Market Order | Maximum speed needed | Slippage risk |
| Limit Order | Slower events, price control | May not fill |
| Stop-Market | Stop-loss execution | Guaranteed exit |
For pure scalping: Market orders for entry, pre-set stop-market for risk.
Position Sizing for Scalping
Smaller positions due to higher frequency:
Formula:
Scalp Position = (Account × Max Risk per Trade) / Stop Distance
Example:
- Account: $10,000
- Max risk: 0.5% = $50
- Stop: 3%
- Position: $50 / 0.03 = $1,666
Why Smaller: - More trades = more opportunities for errors - Slippage adds up with high frequency - Preserves capital for next opportunity
Exit Discipline
The exit is where most scalpers fail:
Exit Rules: 1. Hit target: Exit immediately, no greed 2. Hit stop: Exit immediately, no hope 3. Time limit reached: Exit regardless of P/L 4. Momentum stalls: Exit, don't wait for reversal 5. Uncertain: When in doubt, get out
"Scared money makes money in scalping." Quick exits, small losses, and moving to the next trade beats holding and hoping.
Risk Management for Scalping
Per-Trade Risk
Maximum: 0.5-1% of account per trade
Why so low? - High trade frequency amplifies losses - Slippage can increase actual losses - Need capital for next opportunity
Daily Risk Limits
Stop trading when: - Daily loss reaches 2-3% of account - 3 consecutive losses (take a break) - Feeling emotional or tilted
Win Rate Requirements
Scalping requires consistent execution:
| Win Rate | Risk:Reward Needed | Sustainability |
|---|---|---|
| 60% | 1:1 | Profitable |
| 50% | 1.5:1 | Profitable |
| 40% | 2:1 | Break-even to small profit |
| <40% | Needs review | Likely unprofitable |
Tools and Setup for Scalping
Essential Tools
News Detection: - Real-time Twitter monitoring - Exchange announcement feeds - News aggregator with instant alerts - TradeFollow for automated detection
Execution: - Exchange with fast API/interface - Hot keys for quick orders - Mobile backup for redundancy
Monitoring: - Price charts (1-minute or tick) - Volume indicators - Order book depth
Optimal Trading Environment
- Wired internet connection (not WiFi)
- Multiple monitors or quick window switching
- Quiet environment (focus critical)
- Exchange tabs pre-loaded
Common Scalping Mistakes
Mistake 1: Chasing
Problem: Entering after price has already moved significantly.
Solution: If you missed the initial entry, wait for pullback or skip the trade. Never chase.
Mistake 2: Moving Stops
Problem: Widening stop-loss when trade goes against you.
Solution: Stop is set before entry and never moved further away. Only move to lock profits.
Mistake 3: Overtrading
Problem: Taking low-quality setups because of action addiction.
Solution: Define strict criteria. Only trade setups that match. Quality over quantity.
Mistake 4: Holding Too Long
Problem: Scalp becomes swing trade when not exiting on target/stop.
Solution: Set time limits. If trade hasn't worked in 5-10 minutes, exit.
Mistake 5: Size Escalation
Problem: Increasing size after losses to "make it back."
Solution: Keep size consistent. Take breaks after losses. Never revenge trade.
Scalping with Automation
Manual scalping is demanding. Automation helps:
What to Automate
Detection: - News monitoring (always automate this) - Alert generation - Initial filtering
Execution (Optional): - Entry orders on specific triggers - Stop-loss placement - Take-profit orders
What to Keep Manual: - Complex judgment calls - Unusual situations - Override capability
TradeFollow for Scalping
TradeFollow supports scalping through: - Instant news detection from monitored accounts - AI-powered relevance filtering - Automatic trade execution on triggers - Pre-set stop and take-profit levels
Example Setup:
Trigger: @binance announces listing
Action: Buy listed token
Size: 1% of portfolio
Stop: 5% below entry
Take-profit: 15% above entry
Time exit: 30 minutes
Building Your Scalping System
Week 1: Paper Trading
- Practice detection and decision speed
- Execute theoretical trades
- Track timing and theoretical results
- Don't use real money yet
Week 2: Micro-Size Live
- Trade with minimum position sizes
- Focus on execution, not profits
- Identify friction in your process
- Refine entry/exit procedures
Week 3-4: Normal Size
- Gradually increase to target sizes
- Continue tracking all metrics
- Adjust strategies based on results
- Develop consistent routine
Ongoing: Review and Refine
- Weekly review of all trades
- Identify patterns in winners/losers
- Adjust strategies and parameters
- Continuous improvement mindset
Conclusion
News scalping is the most demanding form of news trading—but also offers the most frequent opportunities. Success requires:
- Speed - Detection and execution in seconds
- Discipline - Strict rules followed without exception
- Focus - Full attention during trading
- Risk management - Small losses, preserved capital
- Selectivity - Only the best setups
Scalping isn't for everyone. It requires specific personality traits, time availability, and stress tolerance. But for those suited to it, news scalping provides a way to generate consistent returns from the constant flow of market-moving information.
Start small, build skills gradually, and let automation handle what it does best—detection and execution speed that humans can't match.
TradeFollow provides the speed you need for news scalping. Detect events instantly, execute automatically, and focus on what matters—capturing profits from market-moving news.