Scalping Trading
What is Scalping Trading?
Scalping trading refers to a short-term trading technique in which the traders hope to earn minor profits out of fast price movements. Such trades are sometimes opened and closed within minutes or seconds. The concept is to carry out many such tiny trades during the course of the day, which collectively can yield a satisfactory overall profit.
How does Scalping Trading Work?
Scalpers seek minor opportunities in price changes – usually a few rupees or paise – and depend on heavy trading volumes to derive profits. They employ technical charts, rapid trading facilities, and tight timing to rapidly get into and come out of the trades.
Key Features - Scalping Trading
- Very short holding periods (seconds to a few minutes)
- High number of trades per day
- Focus on liquid stocks or assets
- Tight stop-losses and quick decision-making
Scalping Trading Example
A scalper may purchase stocks of a corporation at ₹100.00 and sell them a few minutes later at ₹100.20. While the profit may be minimal, repeating this many times daily does make a difference.
Is Scalping for Everyone?
No. Scalping needs speed, discipline, and an intimate understanding of the behavior of the market. It's better for mature traders who are able to observe the market all the time and handle risk effectively.
