Scalp Trading

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Definition of 'Scalp Trading'

Scalp Trading is a form of trading where a trader attempts to make a few points (usually one to five ticks) in an extremely short period of time.

Often the trader is just trying to make money off the bid/ask spread. For example, the trader might be bidding and offering on both sides at the same time.

Although scalp trading garners small profits (and small losses - in theory) these small profits can add up if they exceed the losses. Due to the high number of scalp trades that need to be taken during a day to make significant profits the commissions of scalp traders is often extremely high and can sometimes be a significant percentage of their winnings.

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