Okay, let me give you my definition: In a nutshell, scalping is a trading style is based on assumption that it's easier to get high amount of winning trades when profits are taken faster, minimizing the cases when relatively small profit evaporates and turns into loss. This is opposite to more conventional and commonly accepted approach where a trader lets his profits run risking to lose them on reversal or severe pullback and trying to make up for diminished win/lose ratio by bigger ratio of size of a winner vs. size of a loser.

Scalping is NOT about playing the spread, or trading for rebate.

Swing traders and position traders will find that using scalping as complementary trading approach they can add safety and improve cost basis of their trades.

Struggling traders going through a losing streak will find that scalping is he best way to restore confidence.

Finally, ANY trader, whatever his or her time frame is, will find scalping to be a great way to trade at times when it seems nothing works.

More Scalping Myths...

Myth: Scalping is a separate trading system with its own setups.

Truth: Scalping is not a trading system. Scalping is another way of risk management. It can be applied with any trading system, any setup, any technical indicator.

Myth: Scalping requires certain market conditions.

Truth: Scalping can be applied in any market. In fact, it's much more universal trading approach because it can be used in markets where nothing else works.

Myth: To become a scalper a trader has to abandon his or her adopted trading approach.

Truth: Scalping can and should be adopted as supplementary trading style for a trader using any other approach. Scalping will complement greatly any other trading style. It will add safety and universality.

Q: What's your definition of scalping? Or, what is scalping that you describe?

A: By scalping I mean taking profits equal or slightly higher than the initial risk size of a stop you define for particular trade. Ideally, profit is taken in a single leg price movement in your favor without pullback. This isn't always possible but overall, scalping is not about enduring heavy pullbacks.

Q: Still, doesn't a scalper trade more often than a trader using longer time frame strategies?

A: Generally, yes simply because there are more opportunities in a smaller time frame. 30 minutes chart with no trend can and often will reveal a trend when you go to 5 min or 1 min. It doesn't mean you have to jump on everything that moves though.

Q: So, what defines a tradable opportunity for a scalper?

A: His trading system, whatever it is. It's just applied in a shorter time frame.

Q: Is scalping the only trading style you employ?

A: No. It's a supplementary style for me. I use it when the market is difficult. I also use it when I hit a losing streak and need to restore confidence.

Q: How does scalping help you restore confidence?

A: There is no better way to regain faith and confidence than winning. By not allowing trades to go against you and taking small profits you increase your winning ratio. Sizes of your wins become smaller but win after win is exactly what you need to get back that necessary confidence of being able to gain from the market.

Q: What markets do you utilize for scalping?

A: NASDAQ stocks and e-mini NASDAQ futures.

Q: How do you define stocks suitable for scalping?

A: By volume and by Level 2 appearance. Entry and exit are provided by looking at charts.

Q: Will you show us how to utilize Level 2?

A: Certainly. Not being a directional tool per se, it's still extremely useful for a scalper. That's where you can see what kind of risks your particular stock carries. It allows you to size your trade properly. Without Level 2, you risk to trade too big a size for a given stock. There are also some directional clues Level 2 provides and some tricks market participants employ. I will describe these tricks to the extent they can be read.

Vadym (Threei) Graifer

author of: How to scalp any market and profit consistently