Why Scalping Is A Waste Of Time (Do This Instead) | Profits of Scalping Trading Strategies

This article argues why scalping is a waste of time. Why? Because you highly likely end up losing money.

We don’t recommend scalping when trading. Scalping is hard and almost all scalpers end up losing. Scalping is a waste of time because it involves competing with better-equipped traders and institutions and you need to deal with lots of randomness and noise in the market. Most likely you end up losing money – scalping strategies are rarely profitable. There are better opportunities in longer time frames. Additionally, backtesting is more difficult the shorter the time frame. Scalping is difficult!

We believe you should do this instead: find edges and strategies on longer time frames.

What is scalping in trading?

Scalping is a trading style that profits from small price changes in any financial instrument, be it for example stocks, oil or FOREX. The time horizon is very short: from just a few seconds up to a maximum of some minutes (day trading). The main idea is that small profits per trade generate big profits done many times. As such, this is a trading strategy that could be labeled as high-frequency trading. Most scalpers use a 1-minute scalping strategy.

Obviously, scalping is day trading. However, a trading day is at least 6.5 hours, so even for day traders scalping involves a very short time frame.

Is scalping in for example forex, stocks, and oil profitable?

Very few traders make good money by scalping – almost no one is profitable. Most likely this is the most difficult way to make money as you are competing against better-equipped traders, as you will find out after reading this article. Short-term trading is mainly a zero-sum game (and definitely in FOREX and derivatives and to a certain extent crypto).

What is your edge when scalping?

As always, when you want to start trading you need to ask yourself these very important questions: