Every serious trader has “had a go” at scalping at some point in their journey. The idea of rapid and high-frequency entries, quick profits, with dozens of trades in a single session, suggests that it is a fast path to achieving a potential income from trading. 

The theory is that if you can make just a few pips or points repeatedly and frequently, the results should compound quickly and on a sustainable basis. 

However, stories of multiple account blow-ups and trader burnouts as the effort in a higher stress situation takes its toll bring up justifiable questions as to whether this “good on paper” theory can translate into real-world trading success. 

What Is Scalping?

Scalping involves placing a high volume of very short-term trades, aiming to capture small price movements with trades that are opened and closed within minutes or even seconds of entry. 

Scalpers rely on precision in action, timing, and tight cost control, rather than letting trades breathe or evolve into longer moves, as you see in other types of trading approaches.

Scalping is commonly used in markets with the highest liquidity, where the spread is at its tightest.

For example:

• Forex majors (e.g., EUR/USD, GBP/USD)
• Index futures (e.g., NASDAQ, DAX, FTSE)
• Commodities like gold (though spread and volatility can be a challenge)

How Does Scalping Work?

Traders using a scalping approach are looking for small inefficiencies or bursts of movement they can exploit repeatedly as sentiment shifts.

Three common types of scalping techniques include: momentum scalping, mean reversion, and order flow scalping. 

The first two of these can be used on CFDs on Metatrader platforms. The latter is more common in futures markets.

Momentum Scalping

This approach involves looking for and jumping on breakouts or price surges as price momentum begins to build, with an exit quickly before price begins to pause. 

This is most commonly used at session opens or news events when the volume of traders is high and repositioning of trader positions may be at its highest. 

Faster timeframes are usually used, e.g., 1-minute candles, when there appears to be a brief but technically identifiable sentiment change.

Range-Bound / Mean Reversion Scalping

Mean reversion strategies are based on the principle that prices regularly trade in a range, often while market participants are waiting for the next piece of news or technical breach of either the top or bottom of that range. 

During this time, as the range high and low are tested, it is common that the price will return to the mean of that range after each unsuccessful test. 

Scalpers will attempt to identify these micro-ranges and short a test to the upper end or go long with tests of the bottom end. This can work best in the quieter part of sessions or during consolidation periods, with a breach of the defined support/resistance used as a relatively obvious risk management level. 

Key Principles of a Successful Scalping Strategy

Execution Speed

Fast and reliable execution is critical to optimise scalping strategies. Slippage, delayed fills, and lower liquidity with wider spreads can eat into profits significantly in these strategies, where the profit target is often just a few pips. 

Scalpers may use dedicated VPS servers where latency is less and, when there is evidence that a strategy may be working, may attempt to create EAs that execute the criteria for entry and exit automatically to maximise the time your strategy is working on the market (i.e. it is doing this even when you are not in front of a screen).

Low Spread and Commission

Spread becomes an essential component of your profit potential, more so than with any other strategy. If you are aiming for 3–5 pips of profit and the spread takes most of this away, your market battle becomes even harder than it already is. 

Even a small difference in transaction costs can erode a scalper’s profitability significantly over hundreds of trades. GO Markets offers very competitive spreads as well as other options for spread traders to help you find the best solution for you.

Clear, Repeatable Entry Rules

Because scalping relies on speed and repetition, there is no room for ambiguity or options in any part of your trading rules for action. Entry criteria must be specific, precise, and must be actioned without hesitation once the defined action price hits your trigger level. 

What you use as these action points is irrelevant in this context, be it candle closes or tick movement, the rules need to be black-and-white and actioned accordingly.

Tight Risk Control

Risk management is important in any trading context, and in scalping, this is no different. Stops can be just a few pips or points away, and a single large loss due to second-guessing or not following the plan can easily and quickly undo gains from several winning trades. 

Having referenced the absolute necessity for specific and unambiguous criteria for entry, this is no less vital for exit if you are to achieve your target win rate, desired average won-loss, and maximum acceptable drawdown. 

Time-Bound Trading

Scalping strategies, by their nature, are usually mentally intense with concentration levels critical when trading. 

Management of this should be front and centre of your time plan when you are trading. You should set clear, pre-determined, and non-negotiable start and end times, limiting the amount of time to maintain an optimum trading state and reduce the likelihood of errors in decision making. 

For example, if your scalping plan is best actioned on session opens, limit your time to these, then walk away. 

Risks and Pitfalls of Scalping

While scalping can be successful if you adopt the key principles above, it’s also very easy to fall short of what is required to achieve success on an ongoing basis. Rigidly adhering to what is needed is something to constantly remind yourself of, as there are common key challenges that have the ability to derail the trader (and they often do).

Overtrading

Scalping may lead to ‘compulsive’ overtrading. The “thrill of the chase” created by the high intensity of this trading style can tempt traders to push past their planned trade limits, stray from the strict criteria for entry, as they try to force more trades.   These rarely create positive trading outcomes.

Spread and Slippage

You need to become a measurement guru, watching key trading metrics on an ongoing basis, including the impact of cost,s is critical as previously stated. Widening spreads can be massively impactful on profit potential, and some would have a maximum spread as part of the entry criteria because of this. This can and should be reviewed during your trading activity and as part of your trading business ritual. 

Psychological Strain

Scalping is high-pressure and “fast” decision-making and action-taking.  This pace is not for every trader, and you must monitor both your behaviour and performance during trading, adhering to and reviewing the boundaries you have set, but also be honest with yourself to look at something else if this is just simply not a “fit” for you. 

The Case for Automation?

Many scalpers explore the use of EAs for the automation of their tested scalping strategies. Of course, this will eliminate some of the critical challenges by taking away the immediate “in front of chart” stress.

There is also a strong case that this will help in “not missing” trades through an inability to watch markets for 24 hours.

Don’t be fooled, though; this is not a shortcut. The same rigour in terms of creation, testing, and ongoing monitoring with refinement remains. 

It is not saving work — as much work is still required if you are to achieve any success. It is using a tool to provide more execution certainty. It is perhaps worth considering once you have a strategy that shows promise and ticks all of the boxes for the scalping strategy criteria.

A Simple Momentum Scalping Strategy (Example)

Here is an example of a very basic framework for a 1-minute momentum scalping setup on EUR/USD. 

*Note: This is merely an example of how scalpers may structure a scalping plan:

Market: EUR/USD

Timeframe: 1 Minute

Session: First 60 minutes of London Open

Setup Logic:

• Identify when price breaks a 5-bar high with momentum
• Volume increase from previous bar
• Look for a strong bullish candle (body >70% of range)
• Ensure spread is below 0.4 pips

Entry:

• Buy at breakout +2 pips on 1 minute bar close

Exit:

• Use a hard stop of 2 pips from entry signal
• Target 6 pips profit 
• Trail stops to breakeven on a 3 pip move  

Risk Notes:

• No more than 6 trades in a session to maintain focus
• Cap trading session time to 60 minutes.

Final Thoughts

Despite the attractive and exciting high-intensity battle of trader versus market, scalping is not a shortcut or a casual strategy. 

It’s a high-performance, rigid approach that requires great preparation, clarity of planning and action, reaction speed, and precision in execution. 

Take a step-by-step approach; it may be for you (and don’t be shy of walking away if you discover it is not). 

You need to put in the “hard yards” at the front end if you want to see trading rewards from scalping. 

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