What is a scalp?

Scalping is when traders enter and exit trading positions quickly based on relatively small price movements. The objective of scalpers is to use lots of small trades to earn their profit, as opposed to day traders or swing traders who look to make fewer trades that are profitable.

Scalp traders can be limited in their profitability due to factors such as trading fees, limited liquidity for entering/exiting positions and ineffective risk strategies as scalpers can be more susceptible to overtrading.

Scalpers tend to look at very small timeframes, such as one-minute charts. This means they can enter and exit trading positions within a matter of a few minutes. This need to trade more frequently can increase the trading fees paid, thereby reducing their profits.

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