Hello everyone,
I am new to trading and I have a genuine question to ask. I have been “virtually trading” quite succesfully for some weeks now. What does virtually mean? let me explain. Basically, I have been following the 5m chart of a stock (ROR) for a while and, with a trading strategy in mind, I have opened and closed positions purely in my mind. setting stop losses and take profits just to see wether that trade would have gone well for me or not. I know there was no money involved so the experiment is not representative of reality, but i managed quite well I’d say, getting it right most of the times. Basically, the idea is to enter a position at price X when the conditions are for me advantageus and exit normally at a distance of 30 to 50 pips. I believe this is called scalping but I am not really sure. Anyhow, today I decided to try with real money and guess what, the trade would have been succesful if not for a fact I did not take into consideration: THE SPREAD. As soon as the market reached a certain condition (at the time the stock price was 4.32 and my take profit was at 4.76) I clicked on buy without realizing that the spread was 52 pips, above my TP target… needless to say that I closed negative because I bought at 4.84 instead of 4.32, the stock when up to my TP and then dropped again.
So my question is: how do you scalp 10, 30 or 50 pips if the spread is de facto not allowing you to enter at the price you want? is there a broker that allows CFD trading with no spread? is scalping only for forex?
thank you for you help,
Steven
I scalp only. But not stocks. If I scalped stocks I would assume spread and low liquidity could be against me, so I would be more flexible and patient with specific targets. Your trade has to be a great idea and the move will take care of spread and other road blocks.
I scalp gold. Currently with Global Prime which has low spread for gold, and some commission that doesn’t bother me. I see that Brent oil also has low spread, but especially no commission. I also have scalped with XM, no commission but bigger spread which does get in my way. However it makes me really take on better trades that fulfill a fair distance with XM. If im fiddling around trying to make peanuts, their spread prevents me from profiting.
First of all, I advise you to trade on a demo account and execute trades
“Virtual trading” will not benefit you at all even if your guessing game is correct
You have to open trades to familiarize yourself with the spread, bid, ask, SL, TP and other basics in trading
Moreover, for scalping 30-50 pips is huge…scalpers usually aim for 10-15pips max if not less
aiming for 30-50 pips may be considered as intraday trading
and whatever the reason is, you will never have a guaranteed 100% requested price at all times
There are lots of factors that lead to slippage/gap (news,volatility,weekends,etc…)
As for 0 spread, there is no broker that offers you a fixed 0 spread at all times for all instruments
You may try to search for brokers who may have a zero-spread account but this probably applies to specific pairs only and maybe specific timings
Of course, all things considered. Been scalping gold full time last 13 months demo and live. You are right about 30-50 pips becoming day trades, however prices move and whip around that much in seconds. Often feels irresponsible to take peanuts on a chosen move; the actual move warrants a certain distance covered that is at least 40 pips.
Another thing is I wait for undeniable clarity of opportunity which thankfully manifests itself daily. Size can be propped up somewhat, but selectivity becomes extremely important. In gold I look for 15 pips minimum, most opportunities offer a faire double that. I operate the move more than the amount of pips covered.
I dont think theres no spread broker. A tight spread yes but no spread at all… i don`t think.
Oh wow I did not know this. How many trades do scalpers usually make within one trading day? 
@ponponwei they usually take the most trades as they aim for small number of pips
but it still depends on the trader and how many opportunities he sees 