What is scalping?

Scalp trading – or scalping – is this super quick trading style where positions open and close in the blink of an eye.

It's basically the shortest form of day trading out there. You're hunting for tiny price movements. Skimming small profits, over and over again. Like collecting pennies that eventually become dollars.

The idea? Small wins add up. Scalping uses bigger positions but aims for smaller profits. We're talking seconds or minutes here, rarely hours. You jump in at bid or ask price, grab a few points of profit, then bounce. Nothing stays open overnight. Ever.

Scalpers (that's what they call themselves) think it's easier to catch small moves than big ones. Some might make hundreds of trades daily. Hundreds! Each one just aiming for crumbs that eventually make a cake.

This isn't amateur hour, though. Scalping seems particularly difficult to master. It's fast. Really fast. Decisions happen in seconds, not minutes. You need crazy focus. And a solid exit plan, or things can go south pretty quickly.

Scalp trading strategies and techniques

Scalpers have their tricks. Some use scalping as their main thing. Others just add it to their bigger trading toolbox.

The good ones watch price patterns, support/resistance zones, and technical signals. They're glued to short timeframes – one-minute charts, five-minute charts.

Based on what I've seen from 2025 data, these traders kind of love momentum indicators – stochastic stuff, RSI, MACD. Moving averages and Bollinger Bands are still big hits. TradingView's free tools seem super popular now – they're clean and simple for spotting potential setups across different markets.

• Some scalpers use time and sales info to decide entry/exit points. Others set tiny profit targets – like 0.1% to 0.25% of the asset price. There are those who watch for new daily highs/lows. Some even dig into Level II market data to maximize profits. News events that create volatility? Yep, scalpers love those too.

• CFDs make scalping pretty convenient. You get leverage, so smaller investments control bigger positions. This cuts both ways though – bigger wins but also bigger losses.

With CFDs, you don't actually own anything. Just betting on price direction. More liquidity. Easier execution. No overnight charges since you close everything by day's end.

Is scalping for you? Depends what you like. Fast action and specialized techniques might be your thing. It's tricky though. New traders should probably practice with fake money first.

What you need to know about scalping

Scalping has its quirks. Worth knowing before you dive in.

Why do people like it? Less risk exposure from smaller positions. Not a bad thing in today's crazy markets.

More opportunities too. Small price moves happen all the time. They're easier to catch than big ones. Even calm markets have these tiny ripples scalpers can profit from.

And the volume! Some scalpers hit a hundred trades daily. Or more.

The downside? It's intense. Not everyone can handle the pressure or make decisions that fast. Profitable for some, but definitely risky. Timing matters enormously. Market shifts that catch you off-guard can hurt badly. It's a sprint, not a marathon.

2025 data suggests the successful ones are religious about risk management. They use tight stop-losses and calculate position sizes carefully. Trading fees have become a big deal for profitability calculations. Many now prefer ECN brokers over market makers – better spreads, faster executions.

How scalp trading works

A scalp trade assumes securities complete their first price movement stage quickly. Scalpers try to profit from bid-ask spread fluctuations, riding market volatility.

They buy when the spread narrows – ask price lower, bid price higher than usual.

They sell when the spread widens – ask price higher, bid price lower than normal.

Simple concept. Lightning execution.