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Scalp trading is a very fast method of trading by which traders trade stock in a frame of time from seconds to minutes executing a lot of trades during the day. Even though your goal will be for gains of only 1 or 2 pennies per transaction/trade, when you consider the high volume of shares you will be executing, your results can be substantial. In addition, you can still be profitable even if your trade ends up flat. Why? Because when you add liquidity to the market, the ECN will rebate back to you a portion of the trade. Incorporating this one strategy can generate a good income. Specifically, scalp traders trade in between the bid-ask spread. They buy a stock at the bidding price then quickly sell the same position at the asking price. Because this method of quick investing does better on equities that are priced low that are slow moving, scalp traders build their account by transacting large volume. Scalp trading has no big one time profits, yet there are lesser chances of losing thus it is has a lower risk level than swing trading or day trading. But wait, scalp trading is not easily done.

Scalp trading is a very fast style of trading where you buy and sell a stock in a frame of time from seconds to minutes transacting many transactions within a day. Even though your goal will be for profits of only 1 or 2 pennies per transaction/trade, when you consider the amount of shares you will be trading, this can amount to healthy profits. In addition, you can still make a profit even when your trade breaks even. how come Because if you add liquidity to the market, the ECN will rebate back to you a portion of the trade. Exercising just this simple strategy could provide a good income. In short, scalp traders trade in between the bid-ask spread. They buy a stock at the bidding price then immediately sell the same position at the asking price. Because this style of trading does better on low priced stocks that don't move much, scalp traders build their account by trading big volume. Scalp trading has no big one time profits, yet there are fewer chances of losing and so it tends to be a lesser risk style of trading. But wait, not just anybody can scalp trade.

You need the proper tools and rates to trade this style. It requires deeply discounted scalp trading rates and direct access to NYSE floor routes. Both of which you would have a hard time finding at your E*trade or Scottrade broker. So how can you do this? There are proprietary trading firms that take you on as an experienced trader. And if you are not, you will need to find a proprietary trading firm that will teach you.

Finding the right proprietary trading firm means locating a firm that allows you to trade their capital as well as offer rates that are discounted. Many proprietary trading firms will let you join them with a risk deposit of only $5,000. With that, they will let you trade with $100,000 or more if you have a profitable track record. It's not unheard of for a proprietary trading firm to accept risk deposits of $10,000 and provide you with the ability to trade with $300,000 but you need to realize that they will want a percentage of your profits. The profit sharing scale can range from you getting 50 to 95% but that will depend on your experience. The more profitable you are, the less they will require.

The most important decision when finding a proprietary trading firm for your scalp trading method will be commissions and floor routes offered. Inquire as to what floor routes they have access to and if they can provide you with personal access to a floor specialist. Any good proprietary trading firms will do this if you are a large volume trader. Next, find out what their commission rates are. Ideally, you want to find a firm that will charge .0005 to .0007 per share. On a 2,000 share trade, that would be 1.00 to 1.70 dollars in and out; much better than your $8.95 per trade rate at E*Trade. Also make sure that they pass the rebates back to you because as you will learn, the rebate is just as important to your scalp trading.

Many courses are available that instruct the art of scalp trading. Get educated so you have a better chance for profits. Furthermore, if you need a reliable company to trade with, the proprietary trading firm below has deeply discounted rates, many floor routes and a solid training program. Happy trading.

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