A style that takes many small trades held for seconds to minutes, aiming to capture a few ticks each.
Scalpers rely on tight bid-ask-spreads, fast execution, and high liquidity. Costs are the enemy: a few ticks of profit per trade leaves little room for slippage and commissions.
It suits people who like intense focus and quick feedback, and it is unforgiving of hesitation or a single large loss. In the US, stock scalpers face the pattern-day-trader-rule.
Example: a futures scalper targets 2 ticks ($25) on es per trade with a 2-tick stop, taking 40 trades a day. At a 58% win rate before $4 round-trip commissions, the day nets about $240.
Original diagrams for the ideas on this page. Illustrative, not real market data.
The bid-ask spread. Buy orders sit below, sell orders above, and the gap between the best bid (50.01) and best ask (50.04) is the spread you pay to cross. Bar length shows the size resting at each price.
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