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Thread: Scalping?

  1. #1
    Join Date
    Dec 2006

    Default Scalping?

    What exactly is considered as scalping? And I also see that some brokers do not allow scalpers. Why is that?

  2. #2
    Join Date
    Dec 2006
    Scalping is carrying out hundreds of trades in a session, often holding them for a few seconds at a time, in order to make a few pips on each trade.

    Brokers do not like this because it hits their profits. This also applies to those who enter large amounts of money just before a big news release, make say 80 pips profit and then exit the trade. In some cases, I've heard that even honest, successful traders who are making money are not liked by some brokers. What happens is the trader becomes 'flagged' and closely watched. Then every obstacle possible is put in the way, e.g. orders not fulfilled, spreads widening and big delays on orders. This hasn't happened to me, but have a good look on the web, the warnings are there.

  3. #3
    Join Date
    Dec 2006
    Cairo, Egypt
    Because in range bound markets currencies tend to move up and down in a certain range, traders have developed strategies to gain pips from this range bound. Scalping the market. A few pips that is.

    But traders will do it with a big amount of money and exit market within seconds or few minutes. Brokers do not like you to make that.

    Some brokers have certain policies regarding minimum time of holding a trade, and such rules apply to prevent scalping the market.

    Make sure you read the broker's policy.

  4. #4
    Join Date
    Dec 2006
    Scalpers try to take advantage from delays in quote pricing. Brokers want to gain money in every transaction (the spread). So by taking advantage from the delays, scalpers are trying to get away from paying these fees.

  5. #5
    Join Date
    Dec 2006
    but why would they mind? it's their profit as well.
    by buying and selling within seconds the broker DOES make his "spread money"... it's not like the scalper got away with it.
    the only real reason I see is the one Dunny posted (about the delays in quote).

  6. #6
    Join Date
    Dec 2006
    Norristown, PA
    I don't know if I'm wording this correctly but I read somewhere that brokers can push large amounts of orders over to interbanks if they choose to which prevents them from taking losses and allows them to profit from the spread only. If people scalp than they are unable to dump the orders off and it could possible increase their losses.

  7. #7
    Join Date
    Dec 2006
    Scalpers are traders that are in and out of trades very quickly. Usually they are in a trade for no more than a couple of minutes.

  8. #8
    They also go for very little profits. If they are up 2-3 pips, they will close their trade and look for the next one. Instead of looking for the 100 pip winner, they take several smaller winners. Not the best kind of trading in my book but some people are good at it.

  9. #9
    Join Date
    Dec 2006
    Why don't you guys think scalping is good? It sounds like it's a whole lot easier to wait for a 2 to 3 pip profit than to wait for 100 pips.


  10. #10
    Join Date
    Dec 2006
    largeincharge i guess that those 100 pip trades are harder to spot, that`s why lots of people trade the scalpers way!
    I have just discoverd that i`m actually a scalper, well atleast i`m trying to be one! Anyone triyng out this method seriously?
    Some might now any material on this type of tradeing? Would be happy to hear you out!

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