I don’t recommend scalping for the retail traders because the transaction cost will eat up most of your profits.
And you’re slower than the machines which put you at a major disadvantage.
Still, if you want to learn more, then read on…
Scalping is a very short-term strategy where you’ll hold trades minutes or even seconds.
As a scalper, your concern with what the market is doing now and how you can take advantage of it.
The main tool you’ll use to trade is order flow (which shows you the buy and sell orders in the market).
An example:
Now, let’s discuss the pros and cons of scalping…
The pros
- Have lots of trading opportunities each day
- Can make a healthy income from trading
The cons
- High financial cost (paying your software, newsfeed, connection, and etc.)
- Glued to the screen for many hours a day
- It’s a highly stressful endeavor
Lastly…
If you want to be a scalper, I recommend you join a proprietary trading firm because they will provide the tools to help you with it.