Scalping
Trading StylesQuick Definition
A trading strategy that attempts to profit from small price changes, often holding positions for minutes or seconds.
Detailed Explanation
Scalping is an ultra-short-term trading strategy where traders aim to capture small profits repeatedly throughout the day. Scalpers might make dozens or hundreds of trades daily, holding positions from seconds to minutes. Success requires tight spreads, low commissions, fast execution, and excellent discipline. Scalpers often focus on highly liquid markets and use high leverage to amplify small moves. Common techniques include order flow trading, tape reading, and trading the bid-ask spread. While individual profits are small, they can accumulate significantly. Scalping is demanding, requiring constant focus and quick decision-making.
Real Trading Example
A scalper might buy EUR/USD at 1.1000 and sell at 1.1002, capturing 2 pips profit, repeating this process dozens of times.