What is Scalping?
Scalping is an ultra-short-term trading strategy that aims to profit from small price changes, often holding positions for seconds to minutes with large position sizes.
Scalping Explained
Scalpers make dozens or hundreds of trades per day, targeting small per-share profits that add up over many trades. It requires lightning-fast execution, Level 2 data feeds, and direct-access brokers. The strategy depends heavily on high win rates and tight spreads to overcome commission costs.
Real-World Example
A scalper buys 2,000 shares of a stock at $25.01 and sells 15 seconds later at $25.04, making $60 minus commissions. They repeat this pattern 50 times throughout the day.
Related Terms
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