Scalping Trading Strategy

May 8, 2012

What is 'Scalping'?

'Scalping' is a trading strategy that attempts to make many profits on small price changes. Traders who implement this strategy will place anywhere from 10 to a couple of hundred trades in a single day in the belief that small moves in stock price are easier to catch than large ones. 
Traders who implement this strategy are known as scalpers. The main goal is to buy (or sell) a number of shares at the bid (or ask) price and then quickly sell them a few cents higher (or lower) for a profit. Many small profits can easily compound into large gains if a strict exit strategy is used to prevent large losses. 
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