What is Scalping?#
Scalping is a trading strategy that aims to profit from very small price movements in very short periods (seconds to minutes). A scalper may open 10-50+ trades per day.
Key Characteristics of Scalping#
- Short duration: Trades last seconds or minutes
- Small profit target: 5-15 pips per trade
- High trade count: Dozens of trades daily
- Low spread requirement: Trading cost is critical
- High concentration: Active screen monitoring required
Best Timeframes for Scalping#
- M1 (1-minute): For fastest entries/exits
- M5 (5-minute): Most popular scalping timeframe
- M15 (15-minute): Cleaner signals, less noise
Essential Scalping Indicators#
1. Moving Averages (EMA 9 and EMA 21)
Used to determine short-term trend direction.
2. RSI (14)
Identifies overbought (>70) and oversold (<30) zones.
3. Bollinger Bands
Shows volatility and potential reversal points.
4. VWAP
Volume-weighted average price — identifies institutional levels.
Simple Scalping Strategy#
- Determine trend: EMA 9 > EMA 21 = bullish
- Filter with RSI: RSI 40-60 is neutral, be careful at extremes
- Bollinger Band bounce: Buy at lower band, sell at upper band
- 5-10 pip target, 5-7 pip stop loss
Choosing a Broker for Scalping#
- Low spread: 0.6 pips or less on EUR/USD
- Fast execution: Under 1 second
- Allows scalping: Some brokers restrict it
XM is ideal for scalping: Spreads from 0.6 pips, 99.35% execution under 1 second, scalping fully allowed.
Warning: Scalping requires high stress tolerance. Beginners should gain experience with swing trading first.