A trading style that capitalizes on small percentage moves in the prices of tradable assets (e.g., securities, commodities, etc). It consists of a series of consecutive trades over short periods of time (typically minutes). During the course of a trading day, traders attempt to scalp very small profits off lots of trades, watching charts and instantly placing orders around short-term trends.
Scalp trading uses low-risk price setups, taking advantage of positions opened and closed out in the same trading session. For a scalp trade, traders usually target a profit range of 1% to 3%, using a direct access trading system for instant order execution. Scalp trading is better implemented in liquid markets.
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