What is Scalping Strategy?
Scalping is a day trading strategy focused on making small profits from numerous trades throughout the day, with positions typically held for seconds to a few minutes.
Scalping Strategy Explained
Scalping requires intense focus, fast execution, and direct-access trading platforms. Scalpers look for high-liquidity stocks with tight spreads where they can enter and exit quickly. The edge comes from small per-trade profits multiplied across many trades. This style demands the most screen time and the quickest decision-making of any trading approach.
Real-World Example
A scalper watches Level 2 data on a high-volume stock. They see a surge of buy orders and immediately buy 1,000 shares at $25.02. Thirty seconds later, the price ticks up to $25.06 and they sell. Profit: $40 minus commissions, repeated 50 times per day.
Related Terms
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