In plain English
What Scalping means
The idea is to pursue many small, short-lived opportunities instead of waiting for one large move. In forex, a scalper may trade when liquidity is high and the bid-ask spread is relatively narrow. Because the intended gain per trade can be small, spreads, commissions, slippage, and execution delays can materially affect the result.
Why it matters
Scalping makes trading costs and execution quality unusually important. A strategy that appears profitable using a mid-market chart price may perform differently when actual bid and ask prices, partial fills, or rapid price changes are included. Some brokers also set trading-condition limits that affect very frequent order activity.
Example
Suppose EUR/USD is quoted at 1.10000 bid and 1.10002 ask, a two-pipette spread. A trader buys at 1.10002 and sells moments later at 1.10007. The five-pipette gross move becomes only three pipettes before commission, assuming the sell order is filled at that quoted bid. This is simplified.
Quick answers
Common questions
Does scalping require automated trading?+
No. Scalping can be manual or automated. Automation may submit and manage orders faster, but it also introduces system, configuration, and monitoring risks. The defining feature is the short holding period and focus on small price movements.
Can a scalper hold a position overnight?+
It is possible, but it is not typical. Scalping normally involves closing positions quickly, and an unplanned overnight position can face different liquidity, price-gap, and financing conditions.
Sources