what is a scalping trading

Scalping trading:

Scalping is a trading style specializing in taking profit on a small price changes, generally soon after a trader has been entered and has become profitable. It requires a trader to have a  strict exit strategy, because one large loss could eliminate the many small gains the trader has worked to obtain. Having the right tools, such as a live feed, a direct access brocker and the stamina to place many trades is required for this strategy to be successful.

Scalping trading instead to take as many small profits as possible, not allowing them to evaporate. This is the opposite of the let your profit run mindset. Scalping trading results by increasing number of winners and sacrificing the size of the wins.

The main premises of scalping are:

• Smaller moves are easier to obtain: A bigger imbalance of supply and demand is needed to warrant bigger changes.
• Lessened exposure limits risk: A brief exposure to the market diminishes the probability of running into an adverse event. Scalping trading can be adopted as a primary or supplementary style of trading. 

Scalping trading as primary style 

A pure scalper trader will make a number of trades a day. Perhaps in the hundreds. A scalper trader will mostly utilize one minute charts since the time frame is small.

Types of scalping 

The first type of scalping trading is referred to as "market making", whereby a scalper tries to capitalize on the spread by simultaneously posting a bid and an offer for a specific stock. 

 The other two style are based on a more traditional approch and require a moving stock where prices changes rapidly. 

The second type of scalping trading is done by purchasing a large number of shares that are sold for a gain on very small price movement.