Scalping

Scalpers try to take small, frequent gains from minor price fluctuations. A scalping trade might last from a few seconds to a few minutes and target a handful of pips. Because each gain is small, scalpers usually trade often, in liquid pairs, at the busiest times of day, and many use one-minute or tick charts.

Why costs dominate

When the target is only a few pips, the spread and any commission take a large share of every trade.

Illustrative figures: a scalper aims for 4 pips per trade with a 3-pip stop on EUR/USD. The all-in cost (spread plus commission) is 1 pip. A winning trade nets 3 pips instead of 4, and a losing trade costs 4 pips instead of 3. What looked like a favourable ratio is now 4 pips risked for 3 pips gained, so the trader needs to win more than 57% of the time just to break even. Over 200 trades a month, 1 pip each on a standard lot is about 2,000 dollars in costs. This is why scalpers care about raw-spread accounts, execution speed and slippage.

Broker policies

Most regulated brokers allow scalping, but some restrict very short holding times or strategies that exploit price delays. Check the terms before you start, especially if you plan to use an expert advisor.

Practical notes

• Spreads widen at the rollover, around news and in quiet sessions; a scalping approach that works at 14:00 UK time may not work at 22:00.
• Demo results can be misleading, since demo fills are often cleaner than live ones. See demo account to live trading.
• The pace makes it hard to stick to rules. Keeping a trading journal helps show whether costs are eating the results.

Compare all-in costs with our guide to comparing trading costs.