DEFINITION of 'Scalping'

A trading strategy that attempts to make many profits on small price changes. Traders who implement this strategy will place anywhere from 10 to a couple hundred trades in a single day in the belief that small moves in stock price are easier to catch than large ones.


Traders who implement this strategy are known as scalpers. The main goal is to buy (or sell) a number of shares at the bid (or ask) price and then quickly sell them a few cents higher (or lower) for a profit. Many small profits can easily compound into large gains if a strict exit strategy is used to prevent large losses.

  1. Day Trader

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  3. Compound

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  4. Bid

    1. An offer made by an investor, a trader or a dealer to buy ...
  5. Active Investing

    An investment strategy involving ongoing buying and selling actions ...
  6. Exit Strategy

    1. The method by which a venture capitalist or business owner ...
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    Day traders capture profits from the difference between bid and ask prices by scalping stock. Sensing that a stock is going ... Read Full Answer >>
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    Scalping in the forex market involves trading currencies based on a set of real-time analysis. The purpose of scalping is ... Read Full Answer >>
  3. How do I Implement a Forex Strategy when spotting a Sanku (Three Gaps) Pattern?

    A forex trading strategy can easily be implemented to profit from a market reversal signal that comes from the sanku, or ... Read Full Answer >>
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    Use wedge-shaped patterns to identify bullish or bearish price action when trading currencies in the foreign exchange (forex) ... Read Full Answer >>
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