Scalping is a trading strategy that involves making quick trades to profit from small price movements in financial markets. It is an aggressive and fast-paced approach that aims to capitalize on short-term price fluctuations.
Scalpers typically enter and exit trades within a few seconds to a few minutes and may execute dozens or even hundreds of trades per day. They rely on technical analysis and chart patterns to identify short-term opportunities for profit.
Scalping can be a highly profitable trading strategy, but it requires discipline, focus, and a high tolerance for risk. Scalpers must be able to make quick decisions and react to market changes rapidly.
Because scalping involves making many trades in a short amount of time, transaction costs can add up quickly. Traders must also be aware of the risks associated with high-frequency trading, such as slippage and order execution delays.
Overall, scalping is a popular trading strategy for experienced traders who are comfortable with the risks involved and have the skills and discipline to execute the strategy successfully.