Scalp trading is a very fast method of trading where traders make trades in a frame of time from seconds to minutes transacting many transactions during the day. Even though you will be looking for profits of only 1 or 2 cents per transaction/trade, when you take into consideration the amount of trades you will be trading, the profits can add up nicely. In addition, you can still be profitable even when your trade breaks even. Why? Because if you add liquidity to the market, the ECN will provide you with a rebate. Exercising just this simple strategy could provide consistent profits. Specifically, scalp traders work at exploiting the bid-ask spread. They purchase a stock at the bidding price then quickly sell the same position at the asking price. Because this style of trading does better on stocks that are under $10 that are slow moving, scalp traders build their account by transacting large volume. Scalp trading has no big one time profits, but at the same time there are fewer chances of losing thus it is has a lower risk level than swing trading or day trading. But wait, scalp trading is not easily done.
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