What is scalping?
Page 1 of 2 1 2 LastLast
Results 1 to 10 of 11
  1. #1
    Join Date
    Mar 2006
    Posts
    3

    Default What is scalping?

    I've read before that some brokers don't allow scalpers.

    Why is that and what exactly is the definition of a scalper?

    Thanks.

  2. #2
    Join Date
    Mar 2006
    Location
    USA
    Posts
    14
    Scalpers are very short term traders who take a large amount of trades, but a small amount of pips at a time (1-5pips). They're usually not in a trade for more than a few minutes to an hour.

    A very difficult method of trading if you can't be in front of your trading station all the time i think.

  3. #3
    Here is a link to the Babypips school section that talks about the different trading personalities.

    Discovering Your Trading Personality | College: Multiple Trading Personality Disorder | Learn Forex Trading

    I recommend reading all of the babypips school section.

  4. #4
    Join Date
    Dec 2008
    Posts
    36
    Quote Originally Posted by KooliBooli View Post
    I've read before that some brokers don't allow scalpers.

    Why is that and what exactly is the definition of a scalper?

    Thanks.
    A scalper could be defined as someone who is in this part-time only, that enters into the game only when he has sure shot. Like Tradervlad said, scalpers make short-term trades. I‘ve never heard of a broker that didn’t allow scalpers, doesn’t sound like a very accessible broker that one.

  5. #5
    mp6140 is offline Banned FX-Men Honorary Member
    Join Date
    May 2008
    Posts
    1,056
    as stated previously, "scalping" is extreme short term trading where one simply tries to make a few pips, but trades a large amount of times to make a decent profit and is opposed to "investing" where a position is taken and allowed to reach its profit point over a long period of time, from days to weeks or longer (aka, "position" and "swing" trading !

    there are "brokers" who discourage "scalping" and those who dont care.

    some, like Crown, state absolutely that more than two trades of 6 pips or less makes you a "scalper" and they will not service you.

    others make the spread so wide that its almost impossible to make a profit on small moves and others make moving your tp so difficult, that you cant "follow" the strength of the trade with your tp.

    ECN's are far more friendly to scalpers than many brokers here in the USA, but strangely enough, in europe, britain, russia and offshore, "brokers" seem to like scalpers, probably for the numbe of trades they make and the "spread" points the broker makes on your trade --- they simply have a different outlook on how THEY make a profit than here in the US.

    If you make ONE trade of 100 pips, they ONLY make that one time spread difference, but if you make 25 trades of 4 pips each, they make a whole lot more !

    additionally, in Britain and other parts of the world, you deal thru what is known as "spread betters", and you pay NO taxes as you are dealing with "bookies" and not brokers !

    different strokes

    mp
    Last edited by mp6140; 12-23-2008 at 12:31 PM.

  6. #6
    Join Date
    Dec 2008
    Posts
    36
    Quote Originally Posted by mp6140 View Post
    there are "brokers" who discourage "scalping" and those who dont care.

    some, like Crown, state absolutely that more than two trades of 6 pips or less makes you a "scalper" and they will not service you.

    others make the spread so wide that its almost impossible to make a profit on small moves and others make moving your tp so difficult, that you cant "follow" the strength of the trade with your tp.

    ECN's are far more friendly to scalpers than many brokers here in the USA, but strangely enough, in europe, britain, russia and offshore, they seem to like scalpers, probably for the numbe of trades they make and the "spread" points the broker makes on your trade --- they simply have a different outlook on how THEY make a profit than here in the US.

    If you make ONE trade of 100 pips, they ONLY make that one time spread difference, but if you make 25 trades of 4 pips each, they make a whole lot more !

    additionally, in Britain and other parts of the world, you deal thru what is known as "spread betters", and you pay NO taxes as you are dealing with "bookies" and not brokers !

    different strokes

    mp


    Thank you for that, so according to what you say about the spread, scalpers are good money for brokers, right?

  7. #7
    mp6140 is offline Banned FX-Men Honorary Member
    Join Date
    May 2008
    Posts
    1,056
    remember, accounting is an art form that tries to make either profit or loss look perfectly acceptable --- some "brokers" (who are really nothing but "middlemen" between the "retail trader" (you and me) and the large banks make money by the amount of "spread" going thru their hands, and how much "sticks" and stays with the company. These brokers like more and more trading because MORE money "sticks" to them.

    OTHER forms of broker accounting attempt to not only make the spread, but also profit from your selling them your trade at a lower price than THEY could have bought it because the currency price reversed and it scared you into selling before (you think) the currency becomes worthless, although in lieu of all out nuclear war, i doubt most currencies will become "worthless" !

    the second set of "brokers" are actually trading against you in addition to making the spread and they are the ones of song and fable --- out to get you is NOT a paranoid feeling.

    the ECN's DO NOT trade against you, and therefore make their money on commissions AND the spread and so dont give a rats rump what you do as long as you do it a LOT !

    there are some "brokers" who feel the same way, and DO NOT have a dealing desk (translation -- traders trading against you) and so they make money on how many trades you do a day !

    this site has a number of forumns and information in the school that should advise you of which is which and you make your choices, REMEMBERING that it really doesnt matter WHO is trading against you as there ALWAYS is someone or something who is doing that !

    basically, you choose what you want to do and then go find a broker to accomadate your style, kinda like choosing the rite kind of "arm candy" to take to the country club with the thought in your mind of making your EX girlfriend jealous as all get out !

    clear as mud, huh ? There is SO much to learn about brokers that it would take a large chapter in the book i will never write, so go forth and find out yourself --- remembering the broker you start with is not the broker you will end up with, kinda like wives !

    enjoy and trade well

    mp

    Within the great hall at Elfinore stands a wondrous coffer, precisely four cubits square and securely latched against the outside world. Inside that repository, shut away from impertinent eyes, abides many an intriquing trading secret garnered from around the world and over the ages !

    As a child, i used to watch from the darkness as the secrets were debated and annotated by the elders. No one there held a single thought of my presence -- BUT I KNOW WHERE THEY HID THE KEY !!







    Quote Originally Posted by rufus_cornell View Post
    Thank you for that, so according to what you say about the spread, scalpers are good money for brokers, right?

  8. #8
    Join Date
    Nov 2008
    Posts
    13
    Quote Originally Posted by mp6140 View Post
    the ECN's DO NOT trade against you, and therefore make their money on commissions AND the spread and so dont give a rats rump what you do as long as you do it a LOT !
    Actually it's not exactly like that. The ECN brokers make their money only off the commisions.
    If you pay the spread, it's your counterparty (the other buyer or seller connected to the ECN) the one who gets it, not the broker.

  9. #9
    mp6140 is offline Banned FX-Men Honorary Member
    Join Date
    May 2008
    Posts
    1,056
    actually, a mistake in how i wrote that and i agree with you and thank you for the correction, but the bottom line is STILL that youre paying commission and spread

    LOL

    thnx

    mp

    Quote Originally Posted by Yosako Mimoto View Post
    Actually it's not exactly like that. The ECN brokers make their money only off the commisions.
    If you pay the spread, it's your counterparty (the other buyer or seller connected to the ECN) the one who gets it, not the broker.
    Last edited by mp6140; 12-25-2008 at 11:59 PM.

  10. #10
    Join Date
    Dec 2008
    Posts
    107
    My god this is an excellent thread.

    Thanks guys.
    Last edited by PipsyGirl; 07-24-2010 at 05:19 PM. Reason: Advertising

Forum Sponsors

Similar Threads

  1. Replies: 16
    Last Post: 02-19-2013, 09:14 PM
  2. Scalping. What is it and...
    By cbarnett808 in forum Newbie Island
    Replies: 4
    Last Post: 10-26-2012, 04:09 AM
  3. Scalping - What S&Rs to Respect?
    By George C in forum Newbie Island
    Replies: 6
    Last Post: 07-09-2009, 03:45 PM
  4. What is scalping ?
    By fattyx in forum Newbie Island
    Replies: 4
    Last Post: 02-28-2008, 12:00 AM
  5. What is scalping?
    By DARIMAKO in forum Newbie Island
    Replies: 22
    Last Post: 02-17-2008, 07:58 AM

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •  
"To be successful, you must decide exactly what you want to accomplish; then resolve to pay the price to get it."
Bunker Hunt