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.
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.
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).
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.
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.
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!