The difference between scalping and day trading?

What exactly is scalping? What is day trading? It seems scalping is poorly defined. If I can’t define scalping, then I can’t define day trading, either.

As a beginner, what is the ideal trade duration for learning?

Scalpers hold their trades for seconds up to minutes, usually less than an hour. Scalping is very short term Day Trading.

Day Traders (as the name suggests) hold their trades intraday only during the trading day that the trade was entered and close their trades by the end of the trading day (usually 5 PM New York Time).

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Thank you for the clear definition. If a trade takes less than an hour, it is a scalp trade. If it exceeds one hour, then it starts becoming a day trade.

A day trade ends before the end of a trading day. A day trade could become a swing trade that bleeds into the next days.

Got it.

Good Day amano.kenji, welcome to the trading world. Choosing a comfort trading timeframe for yourself is a very important entry decision for you. Basically difference of both type of trading, results you in taking more trades in a day or just 1 trade in a day.

Scalping normally takes place for a very short entry after hitting 10 to 20pips in profit and my advise for scalping you will have to be in an entry whereby risk & reward gives at least 1:2 ratio best at 1:3 ratio. Timeframes best suit for scalpers are M15 for direction confirmation, M5 for entry confirmation and M1 for entry. Do not ever hold your position as it will cost you bad damage if there’s reversal on your decided entry which leads to emotional trading decision. Do not bother if you have taken a profit at 20pips and it actually resulted in 40pips movement. As a scalper, there are many opportunites in a day for your trades and don’t rush because you have to be a sniper. Successful scalping trades may reward you good profits.

Day trading provide lesser stress as you don’t have to monitor your charts every second, every minute, every hour. Day trades give you at least 50pips and above. H4 for direction, M15 for direction confirmation, M5 for entry confirmation and M1 for entry. Risk & Reward ratio 1:2 is good enough. Set two TPs for your day trade, for example TP1 at 50pips & TP2 for 100pips (for xauusd) . Don’t forget to set Breakeven points for your TP2 entry.

Advice, if you are a very emotional trader don’t go for scalping

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This doesn’t make sense to me.

I see scalping as a learning tool. I have yet to be profitable. If I trade more often, I learn more quickly.

When I learn, I would use a small account to feel real emotions but lose little before increasing the account size. Paper trading and demo trading are useful for practice, but it’s good to start practicing with a little amount of real money to learn how to handle emotions.

Without learning how to handle emotions, I cannot remain profitable in the long term.

A person who is disciplined about everything can become disciplined about trading, too. Thus, I practice monk-like discipline in my daily life, too.

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I don’t recommend emotion in trading. You will end of loss, I did. Consider it’s a business and don’t trade in a way that you believe, you have faith,… You should have solid data and analysis that your trade would go to the TP point and accept to Stop it.

It always used to mean “covering the spread,” i.e. absolutely tiny trades. In professional trading circles, it still does.

In beginners’ forums online (but nowhere else, really) so many people use it just to mean “fast-ish, small-ish trades” that it’s almost lost its original meaning.

People here talk about “scalping 5-minute charts” and sometimes even “scalping 15-minute charts”!! That’s all rubbish. Scalpers aren’t using timed charts at all, those are much too slow. They’re using tick charts.

Also you can’t “scalp” CFDs anyway, because there isn’t a market to scalp. You’d be scalping your own “broker” (actually the counterparty) who obviously wouldn’t tolerate it for very long, if you were any good at it, if you think about it?! (In reality, nobody is any good at it, for good and reliable reasons, and “brokers” make a lot of profit out of all the people trying!).

“Day trading” is a term that’s a hangover from stock trading. It just means “closing your position in time to avoid settlement,” i.e. before the end of the business day. In forex and in derivative-trading, the correct term now is “intraday trading,” i.e. “within the day.” Forex doesn’t close overnight (only at weekends) so it’s an out-of-context expression anyway.

For anything that involves indicators, don’t look at anything faster than daily charts, because almost all indicators were designed from daily charts, to work on daily charts (a point usually overlooked by beginners, promoters, self-promoters and people selling services/products/information on Youtube!). You might find indicators of some value on 8-hour charts (those can be used more or less to follow forex “sessions”, which does at least have some underlying logic) but the idea of trying to use multi-indicator “systems” on hourly or 15-minute charts is, to put it very politely, “rather optimistic,” though is this forum many will swear that it “works” simply because they’re so desperate for it to “work” that they have come to believe it, as hope has triumphed over experience. (In reality, of course, it’s actually traders that “work,” not “systems”.)

I hope this helps.

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@Pipsteroid Have you been smoking that ‘funny stuff’ again?

Here is some text from Microsoft Copilot (an online AI tool):

Copilot

Certainly! Let’s explore the differences between scalping and intraday trading:

  1. Scalping:
  • Definition: Scalping is a specific trading strategy used by some day traders.
  • Objective: Scalpers aim to capitalize on very small changes in a stock’s price.
  • Trade Duration: Scalping trades are opened and closed within a very short span, ranging from a few seconds to a few minutes.
  • Risk and Reward: Scalping is characterized by low risk and low reward. Traders may risk only a few cents per share with a profit target of a few cents or a fraction of a percent.
  • Trade Frequency: Scalpers often execute dozens of trades per day.
  • Position Size: Scalping involves taking larger positions relative to the potential profit.
  • Example: A scalper might trade $10,000 at a time and sell after the price of a stock moves just one or two cents.
  1. Intraday Trading (Day Trading):
  • Definition: Intraday trading refers to any type of active trading within a single market session.
  • Objective: The goal is to profit from short-term changes in the price of stocks or other assets.
  • Trade Duration: Intraday traders hold positions for minutes to hours.
  • Risk and Reward: Intraday trading strategies vary, but they often involve higher risk and potentially higher rewards compared to scalping.
  • Trade Frequency: Intraday traders execute fewer trades compared to scalpers.
  • Position Size: Intraday traders use smaller positions relative to the potential profit.
  • Example: Momentum trading and news trading are common intraday strategies.

Here’s a summary of the key differences:

Table

Aspect Scalping Intraday Trading (Day Trading)
Profit Target A few cents per share Often several percent
Position Size Larger Smaller
Trade Frequency More frequent Less frequent
Risk Management Minimized by holding time Minimized by position size

Remember that while scalping is a form of day trading, it focuses on small price movements, whereas intraday trading encompasses various strategies beyond scalping. Choose the approach that aligns with your risk tolerance and trading goals! :chart_with_upwards_trend::chart_with_downwards_trend:

Learn more

1daytradereview.com2fsr-develop.com3medium.com4fxopen.com5fxempire.com+4 more

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At last some sense :clap: :clap: :clap:

A 1:2 RR with SL to BE @ + 1R is exactly the same outcome as 1:1 R:R, (50pip SL & 50pip TP)… exactly the same as 1:2 (50pip SL & 100pip TP)… same with 50 pip TP and 50 pip trailing SL. That part of trading doesn’t matter.

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The AIs can certainly write something, but they don’t make sense in some cases.

Scalping position size is larger, and intraday trading position size is smaller?

I don’t know what that even means…

AIs don’t really understand trading.

Yes, that’s certainly so.

Scalping involves much smaller takings in terms of pips, so to make it worthwhile, scalpers usually trade more volume-per-trade than intraday traders who aren’t scalping. For instance, where a non-scalping intraday trader might trade 1 lot, aiming to take some number of pips according to what the market will give at the time, a scalper would typically be aiming to take only a pip or two, but might trade 3 lots instead. Just an example. The principle is important, the exact numbers not.

You have great replies above, especially from Pipsteroid and Mondeoman, but if you’re unclear what position size means, you really should work through the Babypips School first. It will help you.

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I would have agreed with you less than a year ago. And I had to think a lot about this when I read it. Again and again, when I answer questions on this forum, it causes me to stress test and learn from my own knowledge (what I thought I knew) and apply new knowledge such as presented in this Copilot answer, to my recent experience. I say this only in reference to my most recent forward testing of a crypto plan that I refer to as Meme Coin Sniping. From the three people I have been following in this pursuit, I have noticed that they all depart from what I consider to be a “normal” bank strategy of 1% of bank per trade, to as much as 10% of bank per trade. It has taken me a month to understand why they risk so much of their bank capital. I have concluded that their expectancy is very high having established their “rules” for their plan. I can certainly see it applying to this particular plan. I will not unleash such irresponsibility in my formative weeks on this new plan, but I can see a situation (based on tens of results, not just the few I have documented) where it becomes logical to slowly increase stakes as a % of bank based on continuously measured results.

The beauty of this plan is that it is scalping, not interday trading, as is my plan from which this variant has been derived, and the speed of measurement could be up to 100 times as fast as my plan of the last nine months or so before I established that my interday trading (that can last up to 3 months per trade) has a positive edge back in Jan 2024.

This is no certainty, but it is very motivating indeed to be able to derive a new plan based on another successful one, just with a change in scope of participating underlying assets.

I have just started trading and it seems that professional trader trade the London
and the New york session as it is the most active sessions. I have a question
if a valid setup was spotted in the asian session would I take the trade or to
wait until the London sessions to open to pull the trigger.
Can the trading community provide me some answers?
Thankyou!!

I wouldn’t mind risking 10% of trading account per trade if the trade setup happens infrequently and offers a high expectancy and perhaps also a high win rate. A high-winrate high-expectancy setup on the daily chart that happens once a month or a week can justify more than 3% per trade.

If a trade setup happens frequently, I would reduce the percent risk per trade.

I know what position size means.

However, shorter trade duration forces a trade to be smaller. A larger trade duration can allow bigger trade size.

That would depend on which pairs or instruments you trade, and what style / time frame you choose. Some pairs can print good movements during the Asian session while others stay rather flat with low volume. If your style is quick on fast time frames you probably will prefer good volatility, but if you are on the Daily chart or slower and stay in position over several days it does not really mater when you enter.
Beware setting tight stops in the few hours right after the NY close, spreads can be scary wide and get you pinged without much movement or significance at all.

Hi Amano.

Damon is referring to TP or Take Profit. This is were you set a limit on your profit, and is used by most professional traders that want to avoid certain ‘dangerous’ market levels, such as support or resistance where prices can become volatile.

In his example, he is using a more conservative TP [TP1 ]of 50 pips and a more aggressive TP [TP2] of 100 pips.

Breakeven is basically managing your trade in such a way, so that you end up with no profit or loss - and basically make nothing off the trade, but manage to protect your margin.

Hope that helps… :slight_smile: