<p><strong>Scalping</strong> is a very short‑term trading strategy where traders open and close positions within seconds or minutes to capture small price movements. In the foreign exchange market, scalpers rely on tight spreads and rapid execution to accumulate numerous tiny gains that add up over a trading session.</p>

<h2>How It Works</h2>
<p>Scalpers monitor price charts on very low time frames, such as one‑minute or tick charts, looking for brief imbalances between supply and demand. They enter a trade as soon as a favorable micro‑trend appears and exit once a predefined profit target—often just a few pips—is reached or when the trade moves against them by a small stop‑loss amount. Because each trade aims for minimal profit, scalpers execute dozens or hundreds of trades per day, depending on market liquidity and their own capacity to react quickly. The strategy demands low latency connections, reliable broker infrastructure, and a platform that supports rapid order entry, such as MetaTrader 5, which offers one‑click trading and customizable charting tools.</p>

<h2>Why It Matters for Traders</h2>
<p>Scalping can be attractive for traders who prefer frequent activity and want to limit exposure to overnight risk. By closing all positions before the market closes, scalpers avoid swap charges and unexpected news events that occur after hours. The approach also allows traders to profit from market noise that longer‑term strategies might ignore. However, the high frequency of trades increases transaction costs, making the <a href="/NewSite/encyclopedia/spread/" class="ency-link">spread</a> a critical factor; a broker with consistently low spreads is essential for scalping to remain viable.</p>

<h2>Example</h2>
<p>Consider a trader scalping the EUR/USD pair on a one‑minute chart. The current spread is 0.8 pips. The trader buys 1 standard lot at 1.10500 with a target of +3 pips and a stop‑loss of –2 pips. Within 45 seconds the price reaches 1.10503, hitting the profit target. The trade yields 3 pips minus the 0.8 pip spread, resulting in a net gain of 2.2 pips, or roughly $22 for a standard lot. The trader immediately looks for the next opportunity, repeating the process throughout the session.</p>

<h2>Key Takeaways</h2>
<ul>
<li>Scalping targets very small profit per trade, relying on high trade frequency.</li>
<li>Low spreads and fast execution are crucial; platforms like MetaTrader 5 support the needed speed.</li>
<li>The strategy limits exposure to overnight risk but raises the importance of transaction costs.</li>
<li>Successful scalping requires disciplined risk management, quick decision‑making, and a liquid market.</li>
</ul>