Scalpers… never heard about them? I’m not surprised...because scalpers are a new breed of traders.
The leading principle behind scalping is that smaller price movements are easier to catch than large ones. And the movement is said to usually be of the following nature: a price movement goes in the trader direction for a while before it goes in its trend direction!
So what do scalpers actually do?
Well… they open and close positions in minutes or seconds attempting to make a profit that way. In a single day, scalpers will open and close tens and even hundreds of positions! They try to make many small profits with small price changes.
Scalpers will trade on leverage and hence increase their risk. However, since the trade is for a really short period of time, the risk decreases. It can be said that scalping is in a way a “risk control” strategy.
However, let’s not forget two thing: 1) The spread that you pay… when you open a trade it makes it more profitable to trade long-term, and 2) Since the gain is so minimal, one major loss could eliminate all the other gains, which could be not only extremely frustrating, but also financially destructive!!
Voila, this is Scalping!