Scalping is intense. It involves opening hundreds of trades a week, aiming to make tiny profits of 3 to 10 pips per trade. Scalpers rely entirely on high leverage and speed to make the math work.
How Does Scalping Work?
Instead of trying to catch a massive 150-pip swing, scalpers trade on the 1-minute (M1) or 5-minute (M5) charts. They capitalize on the minor price fluctuations that happen constantly throughout the trading session (most commonly during the high-volume London and New York overlaps).
The Pros of Scalping
- Market Exposure is Tiny: A trade might last for 90 seconds. You aren't exposed to sudden overnight flash-crashes.
- Regardless of Trend: You can scalp bullish pullbacks in a bearish market. For a 4-pip target, the macro direction often doesn't matter.
- Fast Feedback: You know immediately if your trade is right or wrong, accelerating the learning process.
The Cons of Scalping
- Psychological Exhaustion: Staring intensely at a 1-minute chart for hours is mentally draining. Screen fatigue is real.
- The Spread Eats Profits: If your broker charges a 1.5 pip spread and your target is 4 pips, you have to overcome roughly a 37% tax immediately just to hit breakeven. You must have an ECN zero-spread broker to scalp profitably.